In order to satisfy the requirements of aerospace field for rapid preparation of high strength and toughness complex titanium alloy parts, new Ti-5321 (Ti-5Al-3Mo-3V-2Zr-2Cr-1Nb-1Fe) alloy with high strength and high toughness was prepared by laser cladding forming, which possesses the superiority of rapid prototyping, high efficiency, and good formability. Through single annealing and multiple heat treatment (β-annealing with slow cooling and aging, BASCA) on Ti-5321 alloy, the microstructure evolution was revealed, and the influence of different microstructures on the fracture toughness was explored. Results show that after single annealing, the alloy morphology presents the basket-weave structure consisting of elongated lamellar α phases. Its ultimate tensile strength is 1102 MPa, and fracture toughness is 68.1 MPa·m^1/2. After BASCA heat treatment, the elongated lamellar α phase changes to coarse lamellar α phase and ultrafine needle-like α phase. Thus, the ultimate tensile strength increases to 1309 MPa, whereas the fracture toughness reduces to 45.5 MPa·m^1/2. BASCA heat treatment can enhance the strength but degrade the toughness of alloys. This is because the elongated lamellar α phase in basket-weave structure can greatly increase the crack growth resistance and aggravate the tortuous degree of crack growth path, thus improving the alloy toughness. Coarse lamellar α phase after BASCA heat treatment has a certain degree of directionality, and the cracks only deflect when passing through the coarse lamellar α phase of different β grains. Crack propagation mainly occurs in the ultrafine needle-like α phase. However, due to the extremely small size of ultrafine needle-like α phase, it cannot hinder the development of crack path or deflect the cracks. Thus, the toughness of coarse lamellar structure becomes more inferior after BASCA heat treatment.