The present study aims to investigate the microstructure and fracture properties of AZ91 Mg matrix composites fabricated by the squeeze-casting technique, with variations in the reinforcement material and applied pressure. Microstructural and fractographic observations, along with in situ fracture tests, were conducted on three different Mg matrix composites to identify the microfracture process. Two of them are reinforced with two different short fibers and the other is a whisker-reinforced composite. From the in situ fracture observation of Kaowool-reinforced composites, the effect of the applied pressure on mechanical properties is explained using a competing mechanism: the detrimental effects of fiber breakage act to impair the beneficial effects of the grain refinement and improved densification as the applied pressure increases. On the other hand, for the composites reinforced with Saffil short fibers, microcracks were initiated mainly at the fiber/matrix interfaces at considerably higher stress intensity factor levels, while the degradation of fibers was not observed even in the case of the highest applied pressure. This finding indicates that the higher applied pressure yields better mechanical properties, attributable to the Saffil short fibers having relatively high resistance to cracking. Although an improved microstructure was obtained by accommodating the appropriate applied pressure in the short fiber-reinforced composites, their mechanical properties were far below those of conventional Al matrix composites. In this regard, the Alborex aluminum borate whisker is suggested as a replacement for the short fibers used in the present investigation, to achieve better mechanical properties and fracture toughness.