The squeeze casting process was used to fabricate Al2O3sf/AZ91D magnesium matrix composites before thixoforging. The microstructural evolution process in Al2O3sf/AZ91D was investigated during partial remelting. Tensile mechanical properties of thixoforged automotive component were determined and compared with those of squeeze casting formed composites. The results show that the microstructural evolution during partial remelting exhibited four stages: the formation of liquid, structural fragmentation, the spheroidization of solid particles, and final coarsening. As the holding time increases, the size of solid particles decreases initially and then increases. However, the size of solid particles decreases monotonously as the temperature increases. Increasing holding time or temperature promotes the degree of spheroidization. It is also shown that the cylindrical feedstock of the Al2O3sf/AZ91D composites can be thixoforged in one step into intricate shapes in the semi-solid state. The tensile tests indicate that the yield strength and ultimate tensile strength for Al2O3sf/AZ91D thixoforged from starting material fabricated by squeeze casting and partial remelting are better than those of Al2O3sf/AZ91D fabricated by squeeze casting. This research confirms that thixoforging is a practical method for the near net shape forming of magnesium matrix composites.