The effect of the shear deformation and the superimposed hydrostatic pressure on the formability of magnesium alloy sheet is simulated in terms of the forming limit diagram (FLD). The model employed is the elastic viscoplastic selfconsistent (EVPSC) crystal plasticity model, which accounts for both slip and twinning systems as the deformation mechanisms. The conventional sheets have low formability at room temperature due to the strong basal texture developed by the rolling process. However differential speed rolling process develops relatively weak basal texture by introducing shear deformation. Therefore the formability of the sheets produced by differential speed rolling is enhanced. In terms of the superimposed hydrostatic pressure, it delays the onset of necking and therefore improves the formability of sheets. In addition, the effect of crystal elasticity on the formability of sheets is numerically studied.