The interaction between dynamic recrystallization (DRX) and texture evolution of AZ80 magnesium alloy during hot deformation was investigated by EBSD analysis. A series of compression experiments along extrusion (ED) and radius (RD) direction were carried out on the as-extruded AZ80 magnesium alloy with <101‾0>//ED fiber texture at 200–300 °C. The results show that there are a more homogeneous microstructure and a stronger softening trend on the true stress-strain curves in ED than in RD. Texture in ED tends to rotate towards the //ED basal texture and its total intensity weakens, while the <101‾0>//ED and <112‾0>//ED fiber texture in RD present a sharpening phenomenon. The compression in ED activates discontinuous dynamic recrystallization (DDRX) mechanism and forms dynamically recrystallized grains with random orientation, which is beneficial to optimize the texture and improve the formability of AZ80 magnesium alloy. The deformation in RD activates the continuous dynamic recrystallization (CDRX) mechanism and produces dynamically recrystallized grains following the orientation of parent grains, which results in the sharpening of the initial texture and is unfavorable for weakening the anisotropy of AZ80 magnesium alloy.