Rough- and intermediate-rolled composite billets and finished clad rebars were cut using flying shears. The law of metal rheology and the mechanism of composite interface generation during clad rebar formation were then investigated using metallographic microscopy, electron backscatter diffraction, and scanning electron microscopy. The radial deformation trend of the clad rebars was greater than that of HRB400 rebars and “ears” were more likely to appear during the rolling process. The widths of the decarburization and composite zones and diffusion distances of each element decreased as the cumulative reduction rate increased. Furthermore, as deformation increased, the number of oxides on the composite interface significantly decreased, the proportion of recrystallized grains increased, and the grains became more refined. These changes led to increases in the bond and tensile strengths of the composite interface. According to the research above, the pass filling degree should be within 0.85–0.9 and the cumulative reduction rate should be over 80% when rolling clad rebars.