The effectiveness of high temperature annealing on the cold formability of commercial AZ31 and AZ61 magnesium alloy sheets was investigated. The elongation, n-value and r-value for the improvement in formability were increased by the high temperature annealing for both sheets. The minimum radius ratio in the V-shaped bending of the annealed sheets at 500 °C was improved to 2 from 3 and 4 for the as-received AZ31 and AZ61 sheets, respectively. Although the limiting drawing ratios for circular and square cups of the annealed AZ31 sheet were 1.61 and 1.45, respectively, the high temperature annealing for the AZ61 sheet was insufficient, particularly for the square cups. In addition, a square cup having a bead at the bottom was formed by two-stage cold stamping. In the 1st stage, a cup having a large corner radius was formed by deep drawing using a punch having a large corner radius to prevent the occurrence of fracture. In the 2nd stage, a bead at the bottom of the cup was formed by a rubber punch and grooved die. An AZ31 square cup having a bottom bead was successfully formed.