In this work, the mechanical behaviour and microstructure changes of AA-7075 alloy subjected to a repetitive-bending-under-tension (R-BUT) process were studied. In the R-BUT process, a metallic strip undergoes repeated localised bending and unbending. Load-displacement curves derived from R-BUT tested samples displayed a drastic increase in elongation to failure as compared to samples subjected to standard tensile tests. Additionally, the results confirmed that the force required to deform the R-BUT samples is much reduced as compared to the load required during simple tension. Finite element analysis confirmed that the sample subjected to the R-BUT process underwent intense shear deformation. Transmission-electron-microscopy (TEM) and electron-backscattered-diffraction (EBSD) analysis of the deformed matrix from the ND-RD plane (through-thickness) exhibited evidence for the formation of fine grains. TEM analysis confirmed that the fine grains formed were in the size range of 200–400 nm. Intense shear deformation experienced by the matrix led to shearing followed by spheroidization of precipitate particles. The influence of precipitate particles on the grain refinement process through Particle Stimulated Nucleation of fine grains in the matrix is also presented. EBSD analysis suggested that a Continuous Dynamic Recrystallisation process is the key mechanism behind the grain refinement in the sample during R-BUT processing.