In this study, the samples of LA43M Mg–Li alloy were compressed to the true strains of 0.12, 0.16, 0.36 and 0.60 under300 °C and the strain rate of 0.1 s−1. Under this condition, the stress–strain curves present a special bimodal phenomenon atthe early deformation stage, which is caused by twinning and dynamic recrystallization. In the process of hot compression,extension twins generated first. Twinning accommodated strain and the glide of twinning dislocations dissipated local strainenergy, resulting in the first local stress drop. Then extension twins coarsened and devoured all the matrix, leading to thechange of grain orientation. Subsequently, dislocations accumulated at the grain boundaries and resulted in the increase instress. With further strain, dynamic recrystallization occurred, discontinuous dynamic recrystallization is the main dynamicrecrystallization mechanism. The generation of dynamic recrystallization resulted in the strain softening and leaded tothe second local stress drop. Twinning retards the occurrence dynamic recrystallization and has a crucial influence on themicrostructure development during the hot compression of LA43M.