The microstructure evolution during a hot forging of Waspaloy was investigated using the recrystallization model and FEM simulation. In order to obtain an uniform microstructure, hot forging was carried out by two step. The change of grain size during hot forging has a deep connection with dynamic recrystallization behavior. Avrami-type constitutive equation for the dynamic recrystallization was implemented into an user subroutine of 2D FE simulator. The evolution of grain structure in the two-step forging of Waspaloy was simulated using the 2D FEM user-subroutine. The detailed variation of microstructures due to dynamic recrystallization could effectively be predicted at various locations in a forged pancake.