A comprehensive analysis of the microstructure and defects of a thixomolded AZ91D alloy was conducted to elucidate their influences on mechanical properties. Samples were made at injection temperatures ranging from 580 to 640 °C. X-ray computed tomography was used to visualize pores, and crystal plasticity finite element simulation was adopted for deformation analysis. The microstructure characterizations reveal a hierarchical cell feature composed of α-Mg and eutectic phases. With the increase of injection temperature, large cell content in the material decreases, while the strength of the alloy increases. The underlying mechanism about strength change is that coarse-grained solids experience smaller stress even in hard orientations. The sample fabricated at a moderate temperature of 620 °C exhibits the highest elongation, least quantity and lower local concentration of pores. The detachment and tearing cracks formed at lower injection temperature and defect bands formed at higher injection temperature add additional crack sources and deteriorate the ductility of the materials.