The interfacial microstructure and fracture behavior of squeeze cast SiCw/AZ91 magnesium matrix composite are investigated by transmission electron microscope (TEM). There exists fine discrete interfacial reaction product MgO at the interface in the composites with acid phosphate binder. Definite crystalline orientation relationship between MgO and SiC whisker is observed at the interface, but no definite orientation relationship is determined between SiCw and AZ91 matrix. Nevertheless, preferential orientation relationship is formed. Mg17Al12 precipitates preferentially at the SiCw-AZ91 interface in the aged composite, with a definite orientation relationship with SiC whisker. During the in-situ tensile straining, microcracks nucleated predominantly in the matrix near SiCw-AZ91 interfaces, and the SiC whiskers and twins prohibit crack propagation. The poor ductility of the composite is attributed to the low inherent ductility of the matrix AZ91 magnesium alloy, and the local stress concentration that results from the addition of SiC whiskers.