This study investigated mechanical properties and deformation mechanisms of porous magnesium-carbon nanofiber composites with different porosities manufactured through powder metallurgy. Compressive stress-strain curves of the samples exhibit three phases: Phase I of linear elastic deformation at low stress state, Phase II of a stress plateau, and Phase III of densification. The manufactured porous composites with different porosities show different deformation mechanisms. The composites with low porosity (i.e., 24 and 34%) manifest stretch-dominated deformation with hard (i.e., tension, compression) modes, while the composite with high porosity (i.e., 50%) demonstrates bending-dominated deformation with soft (i.e., bending) modes. The yield strength and the ultimate compressive strength decreased at an increasing rate with the increase in the porosity from 24 to 50%. Theoretical estimations were obtained for the yield strength of dense magnesium composites based on Gibson and Ashby model.