The relatively low strength and poor ductility of conventional AZ80 Mg alloys have been attributed to the limited number of independent slip systems, in combination with the formation of fragile eutectic β-Mg₁₇Al₁₂ networks at grain boundaries. In an effort to overcome these limitations, spray forming followed by equal channel angular pressing (ECAP) was employed to obtain a unique bi-modal microstructure: coarse grains were separated and surrounded by deformation networks consisting of ultrafine-grained Mg with an average grain size of 0.6 µm and ellipsoidal shaped β-Mg₁₇Al₁₂ particles with sizes of 200–300 nm. Tensile tests revealed the advantage of this structure: a yield strength of 235 MPa combined with an elongation to failure of 14%; the values are significantly higher than those of their conventional counterparts (100 MPa-12%, and 140 MPa-5%). The underlying strengthening and deformation mechanisms of this particular microstructure are discussed and analyzed.