The composite rebar of stainless steel is used as a new type of structural material and can meet the strict performance requirements of marine service, effectively solving the overcapacity problem of basic materials. The quality of the composite interface generally depends on the interface microstructure and the distribution of interface compounds. However, the deformation parameters also indicate the interface quality, and a composite product with a uniform interface and excellent performance could be obtained by controlling the reduction rate. Herein, high-temperature compression experiments were conducted on the composite materials of 304/Q235. The near-interface characteristics of the microstructure evolution were studied under a strain rate of 1 s^-1 and reduction rates of 20%, 40%, and 60% to elucidate the dynamic nucleation mechanism and grain boundary migration of the stainless steel side of the interface. Based on Fick's second law of one-way flow under unsteady conditions, an element diffusion model of the composite interface transition region was established to explore the correlation between the interface microstructure evolution and element diffusion behavior. The results show that there is an uncoordinated dynamic recrystallization occured on both sides of the interface at the temperature of 1000 ^oC. The grains completely change during dynamic recrystallization at the carbon steel side of the interface, while the recrystallization dominated by the dislocation mechanism significantly occurs under the working condition with a high pressure rate (60%) at the stainless steel side. At a deformation temperature of 1100 ^oC, dynamic recrystallization is controlled by the dominant twinning mechanism at the stainless steel side, where Σ3 twinning accelerates the recrystallization process. At this time, the coordination of deformation is significantly improved on both sides of the interface. Further studies show that grain refinement and the movement of dislocation and twin defects have a positive effect on the element diffusion behavior. In addition, interfacial intermetallic compound evolution and cavity closure have a significant enhancement effect on interfacial elemental diffusion behavior. The Boltzmann-Matano method is employed to determine the position of the Matano surface, and the Levenberg-Marquardt method is employed to fit the multivariate nonlinear parameters. The established element diffusion model can accurately reflect the elemental concentration in the composite interface transition region, which provides theoretical support for the improvement of metallurgical bonding quality and interface performance control of composite materials.