The constitutive flow behavior of Zircaloy-2 in the temperature range of 650 to 850°C and strain rate range of 0.001 to 100 s^-1 has been studied using constant true strain rate hot compression tests. On the basis of these data, a processing map has been generated using the concepts of a Dynamic Material Model. The processing map has revealed a domain of dynamic recrystallization at an optimum condition of 800°C and 0.1 s^-1. The material undergoes microstructural instabilities at strain rates higher than 1 s^-1 and temperatures lower than 700°C. The observed constitutive flow characteristics have been validated with the help of large scale extrusion experiments conducted at two different temperatures and various extrusion ratios using a conical die semi-angle of 45°. The microstructures observed in the extruded material confirmed the predictions of the processing map. The optimum processing parameters for hot extrusion are found to be 800°C and a mean strain rate of 0.1 to 1 s^-1.