The recrystallization behavior of deformed Ti40 alloy during a heat-treatment process was studied using electron backscatter diffraction and optical microscopy. The results show that the microstructural evolution of Ti40 alloy is controlled by the growth behavior of grain-boundary small grains during the heating process. These small grains at the grain boundaries mostly originate during the forging process because of the alloy’s inhomogeneous deformation. During forging, the deformation first occurs in the grain-boundary region. New small recrystallized grains are separated from the parent grains when the orientation between deformation zones and parent grains exceeds a certain threshold. During the heating process, the growth of these small recrystallized grains results in a uniform grain size and a decrease in the average grain size. The special recrystallization behavior of Ti40 alloy is mainly a consequence of the alloy’s high β-stabilized elemental content and high solution strength of the β-grains, which partially explains the poor hot working ability of Ti–V–Cr-type burn-resistant titanium alloys. Notably, this study on Ti40 burn-resistant titanium alloy yields important information related to the optimization of the microstructures and mechanical properties.