Abstract: Hot forging of powder billets in the β single-phase region effectively widens the hot deformation window, representing a promising advance for manufacturing Ti-6Al-4V (TC4) alloy. While current research predominantly correlates mechanical properties with post-forging microstructures, the initial microstructure of the pre-forged billet is critical to the final microstructural evolution. To elucidate this chain of effects, the high-temperature microstructural evolution of commercially forged TC4 alloy and powder metallurgy (PM) TC4 alloy were systematically investigated in this work. Results reveal that the commercially forged TC4 alloy exhibits poor high-temperature deformation capability, primarily due to its high internal distortion energy, which promotes grain coarsening and microstructural instability. In contrast, the powder billet exhibits superior high-temperature deformability, mainly associated with its low internal distortion energy, along with pore pinning and grain boundary migration hysteresis. These factors effectively suppress abnormal grain growth, preserving a thermally stable and fine-grained microstructure. The fine-grained structure promotes discontinuous dynamic recrystallization (DDRX), thereby softening the material and refining the microstructure to enhance the hot workability of the PM TC4 alloy. Following hot forging, the alloy achieves full densification. The as-forged sample shows a refined α+β lamellar structure, exhibiting an average grain size of 12.83 μm. The alloy possesses excellent comprehensive mechanical properties with the ultimate tensile strength (UTS) of 1075 MPa, yield strength (YS) of 991 MPa, and elongation (EL) of 21.7%. These mechanical properties surpass both the ASTM B381 standard and prior reported values for PM-processed forged TC4 alloys. This work offers a feasible strategy for fabricating low-cost and high-performance TC4 alloys.