Evolution of microstructure and texture during heavy cold-rolling and annealing of Al-2.5%Mg-0.2%Sc alloy was investigated. For this purpose recrystallized sheets of 1mm thickness having finely dispersed precipitates were processed to 3 cycles of ARB (equivalent strain, εeq=2.4) followed by conventional rolling to a final thickness of 200μm resulting in total equivalent strain of 4.0. Evolution of ultrafine microstructure and strong copper or pure metal type texture were observed during deformation. During annealing very stable microstructure was observed up to 400°C but further annealing resulted in formation of a layered microstructure with deformed layer sandwiched between recrystallized layers. Formation of strong cube texture is not observed in the recrystallized layers. Isothermal annealing for longer time at 500°C leads to abnormal growth of Q orientation ({013}<213>) within the deformed layer. © Published under licence by IOP Publishing Ltd.