Mg8Li alloy reinforced by 7 vol.% SiC particles was processed by a powder metallurgical method. Samples were deformed in tension and compression at temperatures from room temperature up to 300 °C. The yield stress as well as the maximum stress decrease with increasing temperature. Decreasing stresses detected at temperatures higher than 150 °C indicate possible presence of recovery process/es. Estimated activation enthalpy is close to the activation enthalpy for the grain boundary sliding. Strain rate sensitivity was estimated at elevated temperatures. Enhanced plasticity was estimated at 300 °C. Light and scanning electron microscopy revealed the cavitations during the high temperature deformation.