Fibers fracture in tensile strained Mg and MgLi matrix composites strengthened with ~10% vol. short δ-Al2O3 fibers (Saffil) is investigated by „in-situ“ scanning electron microscopy and ex-situ“ determination of the length of fibers chemically recovered from tensile failed composites. Little interfacial reaction in Mg matrix composite results in poor interfacial bond so that composite failure proceeds via fiber pull-out with negligible fiber fragmentation. On the other hand, extensive fiber/matrix reaction in MgLi matrix composites promotes formation of strong interfaces which are linked with multiple fiber cross-breakage during tensile straining. These results are consistent with experimental tensile strengths of related composites.