Alloy 825 is widely used in several industries, but its useful service life is limited by both mechanical properties and corrosion resistance. The current work explores the effect of the addition of magnesium on the recrystallization and mechanical behavior of alloy 825 under hot compression. Compression tests were performed under conditions representative of typical forming processes: temperatures between 1100 and 1250 °C and at strain rates of 0.1–10 s−1 to a true strain of 0.7. Microstructural evolution was characterized by electron backscattered diffraction. Dynamic recrystallization was found to be more prevalent under all test conditions in samples containing magnesium, but not in all cases of conventional alloy 825. The texture direction ⟨101⟩ was the dominant orientation parallel to the longitudinal direction of casting (also the direction in which the samples were compressed) in samples that contained magnesium under all test conditions, but not in any sample that did not contain magnesium. For all deformation conditions, the peak stress was approximately 10% lower in material with the addition of magnesium. Furthermore, the differences in the peak strain between different temperatures are approximately 85% smaller if magnesium is present. The average activation energy for hot deformation was calculated to be 430 kJ mol−1 with the addition of magnesium and 450 kJ mol−1 without magnesium. The average size of dynamically recrystallized grains in both alloys showed a power law relation with the Zener–Hollomon parameter, DD~Z−n, and the exponent of value, n, is found to be 0.12. These results can be used to design optimized compositions and thermomechanical treatments of alloy 825 to maximize the useful service life under current service conditions. No experiments were conducted to investigate the effects of such changes on the service life and such experiments should now be performed.