In this work, we investigate the impact of Bi addition on the heat resistance of as-extruded AZ31 alloy during high-temperature annealing and hot compression. Electron backscattered diffraction (EBSD) technique and quasi in situ scanning electron microscopy (SEM) are used to analyze the evolution of microstructures during high-temperature annealing and hot compression, respectively. The test results show that with a prolonged annealing time, the as-extruded AZB313 alloy exhibited a lower grain growth rate, due to the pinning effect of Mg3Bi2 phases distributed at grain boundaries. On the other hand, as the compressive temperature increased, the downtrend of strength is delayed in the as-extruded AZB313 alloy. Thermally stable Mg3Bi2 phases dispersed within the grains act as barriers, hindering the motion of dislocations, which not only provides a more effective precipitation strengthening effect, but also increases the resistance to deformation of grains. Moreover, grain boundary sliding can also be restricted by Mg3Bi2 phases located at grain boundaries. This work provides a new idea for the development of heat-resistant wrought Mg alloys.