Titanium (Ti) particles reinforced AZ91 matrix composite (Tip/AZ91) was prepared by powder metallurgy method. In the present work, we investigated the hot deformation behavior of Tip/AZ91 composite by isothermal compression tests at a range of temperature from 250 °C to 400 °C and strain rates from 0.001 s−1 to 1 s−1. Microstructure observations revealed that Ti particles were distributed uniformly in the composite, with the presence of a diffusion layer containing Mg, Ti, and Al elements between the Ti particles and the magnesium (Mg) matrix. The strain-compensated Arrhenius constitutive model was constructed, and the accuracy was evaluated by error analysis. The stress index exponent (n) was calculated as 4.98, indicating that the dislocation climb mechanism dominates the thermal deformation of Tip/AZ91 composite. Moreover, the calculated activation energy (Q) of 153.7 kJ/mol was observed to be lower than that of the pure AZ91 alloy, which can be attributed to the presence of a particle deformation zone (PDZ). Further microstructure analysis indicated that the continuous dynamic recrystallization mechanism (CDRX) occurred. As the recrystallized grains grow, the texture changes from a bimodal texture to a typical unimodal texture, resulting in a recrystallized //normal direction texture. In addition, the particle stimulated nucleation (PSN) phenomenon was observed around Ti particles at low Zener-Hollomon parameter (lnZ = 20.73) condition.