In this study, we investigated the effect of intermediate heat treatment (IHT) on the texture evolution and stretch formability of annealed AZ31 Mg alloy sheets during different stages of hot rolling. Electron backscatter diffraction (EBSD) and X-ray diffraction (XRD) techniques were used to measure the crystallographic texture and to explain how IHT contributes to the texture evolution in hot-rolled specimens. The behavior of static recrystallization (SRX) during IHT was investigated to explain its role in weakening the basal texture in IHT specimens. Furthermore, t-EBSD was used to investigate the orientation distribution of recrystallized grains in the deformed matrix. Moreover, the effect that IHT can exert on the mechanical and Erichsen Index (IE) of annealed sheets was investigated at room temperature, and also at 100 and 200 °C. An analysis of the different IHT specimens indicated that the influence of IHT on the IE was significantly dependent on the measurement temperature. © 2021 Elsevier B.V.