In this study, effects of dynamically formed precipitates on the microstructure and texture evolution were investigated during the post-deformation annealing. Two ternary alloys of Mg, Al, and Sn were produced and deformed at 250 and 300 °C to form different amounts of strain-induced precipitates during deformation and different levels of dynamic recrystallization. Subsequent annealing at deformation temperatures was performed at various times for up to 4 h and recrystallization, grain coarsening, and precipitation behaviors were characterized. The deformed structures were all partially dynamically recrystallized exhibiting necklacing. Static recrystallization (SRX) progressed by the transformation of the coarse grained un-necklaced regions to fine grains. It was found that increasing levels of pre-existing precipitates on dynamic recrystallized grain boundaries inhibited SRX as well as grain coarsening, by precipitation pinning. Texture was weakened after a short time annealing compared to the as-deformed condition and high amount of precipitates at the grain boundary restricted the grain coarsening and kept the texture weaken associated with grain coarsening.