Magnesium matrix composites (MMCs) combine exceptional low density, high specific strength, and stiffness, positioning them as critical materials for aerospace, automotive, and electronics industries. This review highlights recent progress in the fabrication of Ti-Mg composites and analyzes the mechanisms behind their enhanced mechanical properties. A key focus is the interfacial deformation incompatibility between Ti and Mg phases, which generates strain gradients and promotes the accumulation of geometrically necessary dislocations (GNDs) at the interface. This process not only improves strain hardening and ductility but also reveals the need for advanced micromechanical models to capture the plastic behavior of both phases. The review critically examines the impact of different Mg matrix types (AZ, AM, VW series) and the role of interfacial product morphology and size on bonding and overall performance. Furthermore, Ti reinforcement endows the composites with superior wear resistance and thermal conductivity, indicating broad application potential.