The Mg-8Li dual phase alloy was deformed by multi-directional compression with different passes. Microstructure evolution of deformed Mg-8Li alloy was analyzed by electron backscatter diffraction. X-ray diffraction profile was used to calculate the dislocation density in α-Mg and β-Li phase to reveal the quantitively change trend under different compression passes. The mechanical properties were assessed through tensile and compressive tests. The Mg-8Li alloy exhibited optimal mechanical properties when compressed with 12 passes (sample 12MDC), with a compression yield strength of 183.1 MPa and a tensile yield strength of 124.2 MPa. The improved mechanical properties in sample 12MDC were attributed to an increase in {10 2} twin and {10 3}-{10 2} double twin boundaries, along with the presence of sub-grain boundaries and a reduced grain size in the α-Mg phase. Additionally, the inconsistent results between microhardness and dislocation density calculation manifests the uneven distribution of dislocations in β-Li phase. Broken α-Mg phase brings more phase interface to relieve the strain in β-Li phase, which results to a decreased dislocation density in sample 12MDC (1.19×1011 /m2). Results show that weaken tension-compression yield asymmetry and more even distribution of dislocation in both phases could be achieved when the compression passes increases to 12.