Magnesium alloys are still attractive materials for applications that necessitate light weight due to their low density, moderate strength, and good corrosion resistance. AZ91 is one of the widely applied magnesium alloys due to its very good castability and strength. However, one of the drawbacks of magnesium alloys is the low elastic modulus. So, reinforcing AZ91 with carbon short fibers with the aim of further increasing the strength and improving the elastic modulus is investigated in this study. Squeeze cast AZ91-23 vol.% carbon short carbon (AZ91-C) and the unreinforced AZ91 are deeply examined by tensile testing at different temperatures (20, 100, 150, 200, 250, and 300 °C). Tensile stress–strain curves are measured and the tensile parameters (yield stress, ultimate tensile strength and strain) are defined and presented against the test temperature. Yield stress of AZ91 at 20 °C (109 MPa) is doubled (226 MPa) in the reinforced AZ91-C. Yield stress is found to slightly decrease with increasing the test temperature. Ultimate tensile strength of AZ91 at 20 °C (198 MPa) is increased (262 MPa) in the reinforced AZ91-C. The improvement of the ultimate tensile strength due to reinforcing increases with increasing the test temperature. Flow curves are determined and described by a modified Mecking–Kocks relationship and the flow parameters are determined and described as a function of the test temperature. Microstructure investigation was undertaken of the fractured tensile specimens at the grain boundaries rich in eutectic structure formed at the grain boundaries. Mixed brittle/ductile fracture mode is detected on the fracture surface of unreinforced AZ91, while the SEM investigations show matrix/carbon fiber detachment and fiber fracture as main fracture modes.