The dynamic precipitation of the β phase in AZ91 magnesium alloy during extrusion process and its effects on the microstructures and tensile properties of the alloy are studied. It is found that the mechanical properties are effectively improved by the extrusion process and the dynamic precipitation of the β phase occurs during the extrusion process. The characteristics of precipitation are influenced by the extrusion temperature and extrusion ratio. The dynamically precipitated β phase has a limited direct effect on the tensile properties. The effects of β phase on the tensile properties come from its influence on the microstructure evolution through the dynamic crystallization. The authors consider that the mechanical properties of AZ91 can be further improved by controlling the working processes to optimize the precipitation characteristics of the β phase.