Nanoindentation was performed in selected grain orientations close to [112¯0] and [101¯0] in magnesium alloy Mg–3Al–1Zn. The atomic force microscopy (AFM) and electron backscatter diffraction (EBSD) were used to examine the nanoindentation imprint. Two critical events, yielding and pop-in were observed in the depth–load curves. Slip trace analysis suggests that basal slip is responsible for yielding. The following pop-in events at higher loads are associated with the appearance {101¯2} twins on the surface. The critical resolved shear stress (CRSS) was estimated to be in the range of 220–400MPa for the initiation of basal slip.