The hot deformation and dynamic recrystallization behavior of the dual-phase Mg-9Li-3Al-2Sr-2Y alloy had been investigated using a compression test. The typical dual-phase structure was observed, and average of grain size of as-homogenized alloy is about 110 µm. It mainly contains β-Li, α-Mg, Al₄Sr and Al₂Y phases. The dynamic recrystallization (DRX) kinetic was established based on an Avrami type equation. The onset of the DRX process occurred before the peak of the stress–strain flow curves. It shows that the DRX volume fraction increases with increasing deformation temperature or decreasing strain rate. The microstructure evolution during the hot compression at various temperatures and strain rates had been investigated. The DRX grain size became larger with the increasing testing temperature or decreasing strain rate because the higher temperature or lower strain rate can improve the migration of DRX grain boundaries. The fully recrystallized microstructure can be achieved in a small strain due to the dispersed island-shape α-Mg phases, continuous the Al₄Sr phases and spheroidal Al₂Y particles, which can accelerate the nucleation. The continuous Al₄Sr phases along the grain boundaries are very helpful for enhancing the corrosion resistance of the duplex structured Mg-Li alloy, which can prevent the pitting corrosion and filiform corrosion.