Understanding the fracture mechanism is essential for optimizing the mechanical properties of titanium alloys. The relationship between fracture behaviour and the multistage lamellar microstructure of the TC18 (Ti–5Al–5Mo–5V–1Cr–1Fe) alloy was investigated via in situ tensile and three-point bending tests. The results indicate that the TC18 alloy, featuring a multistage lamellar microstructure (including a β matrix, primary lamellar α phase, bundles, and secondary lamellar α phase), exhibits an excellent combination of strength and ductility. The precipitation of the secondary lamellar α phase significantly enhances the alloy's strength but weakens the stress‒strain compatibility of the microstructure. This results in a smaller crack-tip plastic zone (CTPZ) and causes dislocations to concentrate more at the grain boundaries and, to a lesser extent, at the phase interfaces. Consequently, in the later stages of crack propagation, microvoids and microcracks tend to form at dislocation pile-ups. With increasing stress, these microvoids and microcracks rapidly coalesce, leading to a greater proportion of intergranular fracture and thus reducing the fracture toughness of the alloy.