Evolution of the dislocation structure in Mg97Y7Zn5(at. %) alloy having long period stacking ordered (LPSO) structure was studied during compression tests. Two materials, an as-cast and an extruded one were deformed up to the applied strain of ~25%. The evolution of the crystallite size, the dislocation density and the population of the particular slip systems were determined by the evaluation of the X-ray diffraction peak profiles. A very low dislocation density with the order of magnitude 1012–1013m−2was detected in the compressed specimens. This dislocation density did not increase considerably with increasing strain. At the same time, a significant decrease of the crystallite size occurred during compression. These observations can be explained by the arrangement of dislocations into low energy dipolar configurations, such as kink walls, which do not contribute to the dislocation density measurable by X-ray diffraction peak profile analysis, however they yield a fragmentation of the crystallites.