TC21 titanium alloy, as an important metal to fabricate the aircraft structural components, has attracted great attentions recently. A TC21 titanium alloy with widmanstätten structure was isothermally compressed. Based on the microstructure observation, the evolution of initial β grain, Grain Boundary α phase (α_GB), lamellar α and interlayered β was systematically investigated. The results showed that, with the increasing of height reduction, the α_GB underwent an evolution process from bending/kinking to breaking inducing the corresponding blurring of initial coarse β grain outline. Meanwhile, a significant phase transformation from α to β took place at the terminations of broken α_GB. The evolution of lamellar α and interlayered β in the colony was closely related to their deformation compatibility. In the α colony, the interlayered β experienced a larger deformation amount than lamellar α. The higher distortion energy promoted the occurrence of Dynamic Recovery (DRV) and Dynamic Recrystallization (DRX) to generate many Low Angle Boundaries (LABs) and High Angle Boundaries (HABs) in interlayered β, which induced an apparent grain refinement of β phase. On the contrary, the lower distortion energy and low deformation temperature suppressed the occurrence of DRV/DRX and restrained the globularization of lamellar α. Furthermore, the microstructure observation clearly revealed that the shearing separation mechanism dominated the evolution of the α phase from lamellar to short bar-like morphology.