The low cycle fatigue behaviors of Udimet 720Li (U720Li) and the related microstructure evolution have been investigated at 725 °C under strain control tests. The interrelationships between microstructure factors and properties were analyzed using transmission electron backscatter diffraction (t-EBSD) in scanning electron microscopy (SEM) and transmission electron microscopy (TEM). For comparison, LCF behaviors at 650 °C were also presented to find the inferior aspects of U720Li alloy at relatively higher service temperatures. The results show that recrystallization occurs during the LCF testing at 725 °C. The extent of recrystallization increases with the strain. The LCF property at 725 °C is weakened to a large extent after recrystallization, which could be the significant factor that causes LCF degradation. Combination t-EBSD and TEM are beneficial for characterizing and analyzing the microstructure evolution in terms of primary y' precipitates and dislocations, proposing that gliding dislocations could concentrate into walls to form sub-grain boundaries, with the combination of primary y' precipitates to form sub-grains.