An ultrafine-grained (UFG) Al-30wt.%Zn alloy was processed by high-pressure torsion (HPT) and then the mechanical and microstructural properties were investigated using depth-sensing indentations (DSI), focused ion beam (FIB), scanning electron microscopy (SEM) and differential scanning calorimetry (DSC). Emphasis was placed on the microstructure changes due to HPT processing as well as the effects of grain boundaries and the unusually high strain rate sensitivity. The deformation characteristics are explained by the formation of a Zn-rich phase which wets the Al/Al grain boundaries and enhances the role of grain boundary sliding in this UFG alloy. The occurrence of intensive grain boundary sliding in this UFG alloy at room temperature was also demonstrated by deforming micro-pillars. It is shown that, as a result of grain boundary sliding, the plastic deformation process of the UFG samples remains stable even at the micro-scale without the intermittent flow and detrimental strain avalanches which are an inherent feature of micro-size conventional crystals. This result illustrates the advantage of using UFG materials for effective applications in micro-devices.