Hybrid deposition and micro-rolling (HDMR) is a metal additive manufacturing process that integrates arc direct deposition manufacturing and micro-rolling. A two-dimensional cellular automata and finite volume method coupling model is developed for simulating the microstructure evolution of solidification and the dynamic recrystallization during HDMR forming. The influences of different rolling reductions on dynamic recrystallization fraction, average equivalent radius of recrystallized grains, and the area of dynamic recrystallization region are discussed. The results show that solidification microstructure consists of complete columnar dendrite. The rolling reduction plays a dominant role in determining the area of dynamic recrystallization region and the size of recrystallized grains. The average recrystallized grain size at the top position is not affected by rolling reduction, while the influence of rolling reduction on the dynamic recrystallization fraction and average radius of recrystallized grain is found to be stable, but not linear. The same qualitative and quantitative conclusions are drawn from the experimental results as well.