Fine grains of Two-phase Mg-Li alloy could be achieved by severe plastic deformation. The alloy exhibited a superplastic behavior with a maximum elongation of 306.6% at 623 K with an initial rate of 1.5 × 10−2 s−1. The value of the strain rate sensitivity under 623 K and 1.5 × 10−2s−1 is 0.36, and 121.6–160.0 kJ/mol. The dominant deformation mechanism in this alloy is grain boundary sliding accommodated by a slip which was controlled by lattice diffusion at 523–623 K.