In this paper, the surface microstructure evolution of an AZ31B magnesium (Mg) alloy during laser shock peening (LSP) was investigated. Particular attention was paid to the deformation twinning behavior, which plays an important role in the mechanical properties of Mg alloys. The effect of laser intensity on the twinning distribution was investigated. Twin-twin interactions during LSP process were characterized. The mechanism responsible for the formation of gradient twinning microstructure and twinning-induced hardening effect were discussed.