This paper reports on a study of the relationship between microstructure, mechanical behavior and impact toughness of the UFG Grade 5 Ti alloy. The mechanical behavior and impact toughness of the Grade 5 Ti alloy in a coarse-grained state, and in an ultrafine-grained (UFG) state produced by equal-channel angular pressing (ECAP) with subsequent deformation-and-thermal treatments via extrusion and warm upsetting in isothermal conditions, were studied extensively. It is shown that a strong refinement of α-grains (less than 250 nm) in the alloy by ECAP and extrusion leads to high strength but with low values of the uniform elongation and lower impact toughness. It is demonstrated that, in order to increase the impact toughness of UFG Ti alloys, it is possible to use approaches realizing ductility enhancement associated with an increase of the strain hardening capacity. An enhancement in the impact toughness of the UFG alloy through an increase in the uniform tensile elongation of the sample is achieved by the preservation of the ultrafine size of α-grains (about 800 nm) with predominantly high-angle boundaries and a decrease in the dislocation density due to recovery and dynamic recrystallization during warm upsetting.