In this study, the microstructure evolution and deformation behavior of the extruded Mg-5Al-0.6Sc (AS51) alloy during tensile testing at room temperature (RT) and 250 °C were investigated by electron backscattered diffraction (EBSD) characterization and Visco Plastic Self Consistent (VPSC) simulation. The results showed that a continuous hardening behavior of the alloy occurred during the deformation at RT, and a certain softening was caused by the occurrence of dynamic recovery (DRV) and dynamic recrystallization (DRX) in the late stage of deformation at 250 °C. The primary deformation mechanism at both RT and 250 °C was dislocation slip, with prismatic <a> slip being the dominant deformation mode, and no significant changes in grain size or texture type occurred. By identifying the activated twin variants, the results indicated that the selection of twin variants was closely related to the local stress concentration. The relatively low activation frequency of extension twinning at 250 °C is partly attributed to the fact that the consumption of dislocations by DRV and DRX can effectively relax the local stress concentration. Meanwhile, the DRX mechanism during the deformation of the alloy at 250 °C was mainly discontinuous dynamic recrystallization (DDRX), with a low recrystallization fraction.