The development of preferred crystallographic orientation and dimensional fabric of olivine in relation to deformation were investigated in a thin, continuous chlorite peridotite mylonite rim around the garnet peridotite body of Alpe Arami, Ticino, Switzerland. The mylonite is a foliated rock containing strained relict crystals (porphyroclasts) embedded in abundant, recrystallized matrix material. Petrofabric analysis of the porphyroclasts showed a preferred orientation (the \u03b301 fabric) of \u03b301 = [100] perpendicular to the foliation plane, while \u03b101 = [010] together with \u03b201 = [001] were situated in the foliation. The matrix developed a completely different pattern (the \u03b101 fabric) of \u03b101 = [010] perpendicular to the foliation, and \u03b201 = [001] together with \u03b301 = [100] in the foliation. Petrofabric analysis of a wide range of specimens, however, suggested a transitional relation between these two preferred orientation patterns of the porphyroclasts and the matrix. The \u03b301 fabric is thought to represent a rotationally unstable orientation under deformation conditions present in the mylonite, on the basis of the observed glide systems {0kl} [100]. The \u03b301 fabric, inherited from a neighbouring chlorite peridotite, still exists because it was preserved from recrystallization by this unfavourable position for deformation. In general, however, the clasts’ crystal axes have rotated towards the \u03b101 fabric orientation as observed in the many girdle fabrics. During this process, recrystallization took place at the rims of the clasts establishing the \u03b101 fabric in the matrix. A sequence of microtextures, depending on the strain conditions in the mylonite, have been observed, showing this gradual transition. Matrix grains situated in strain protected areas to the side of porphyroclasts, still showed an inherited \u03b301 fabric because in these areas rotations towards a new deformation position were small. Thin matrix grains in high strain regimes showed the \u03b101 fabric, a rotationally stable deformation orientation they could not change. Just recrystallized porphyroclasts, present in the matrix as spherical agglomerates just fully exposed to the strain, occupy positions concerning habit and location between the grains in high strain regimes and the porphyroclasts, exhibiting transitional fabrics. Crystal plasticity is an important mechanism allowing deformation and development of the observed preferred orientations. High voltage electron microscopy was used to determine glide systems and dislocation substructures in the porphyroclasts and in the matrix. The porphyroclasts showed evidences for strong polygonization during dynamic recovery, while in the matrix a continuous process of dynamic recrystallization proceeded concurrently with deformation after some critical strain, in the form of nucleation and grain growth. In this cyclical process in the matrix, the dynamic recovery was still present, giving rise to some anology with the dislocation substructures in the porphyroclasts. The electron microscope observations allowed an adequate explanation for the transition from \u03b301 to \u03b101 fabrics.