Abstract: The microstructural evolution of rapidly solidified (RS) ZK60 powders extruded at 250°C was investigated. It was shown that formation of new ultrafine grains took place through continuous dynamic recrystallization (CDRX), accompanied by the perfect bonding of powders via severe plastic deformation. At a low strain level, a well-defined structure made up of equiaxed and elongated subgrains was developed. Simultaneously, the operation of basal and non-basal dislocation slip led to the formation of low-angle dislocation cells (LADC) within the elongated subgrains. With increasing strain, the number and average misorientation of LADC increased, resulting in fragmentation of original elongation subgrains into a finally homogeneous fine-grained structure. Almost full-recrystallized structure with an average grain size of 0.4 μm was finally evolved after large cumulative strain. The results suggested that structural change was connected with thermal strain, where dislocation activities dominated this process.