The microstructure and texture are investigated for nanocrystalline Au-13at%Pd deformed by high-pressure torsion. The grain size of this alloy is observed to remain below about 20 nm when subjected to severe plastic deformation. Surprisingly, the initial <110> powder compaction texture does not change significantly during shearing. The results are explained in terms of a grain boundary sliding mechanism involving planar interfaces formed by grain boundary migration.