Ti-5Al-2.5Sn ELI (extra-low interstitial) alloy is a critical lightweight structural material for hydrogen pump impellers in hydrogen/oxygen rocket engines, serving deep-space exploration missions including manned spaceflight program planned for 2030. While powder metallurgy hot isostatic pressing (PM-HIP) offers significant near-net-shape manufacturing advantages for complex parts, the cryogenic plastic deformation behavior of these components is highly sensitive to initial microstructural variables. Specifically, the interactive effects of powder particle size distribution and interstitial oxygen levels on the plastic instability and multiple necking mechanisms at cryogenic temperatures remain insufficiently understood. To address this, high-oxygen and low-oxygen ELI pre-alloyed powders with three distinct particle size distributions (15–53, 53–106, and 15–250 μm) were utilized to fabricate PM-HIP specimens (high-O bacth: 0.14%–0.18%O, low-O ELI batch: 0.078%–0.110%O, mass fraction) for tensile testing at 20 K. The necking evolution and corresponding microstructural response mechanisms were systematically characterized using three-dimensional morphology measurement, Micro-CT, scanning electron microscopy (SEM), and electron backscatter diffraction with kernel average misorientation (EBSD/KAM) analyses. The results indicate that the low-oxygen PM-HIP states exhibit pronounced multiple necking behavior at 20 K, achieving an elongation after fracture (δ₅) of 23.5%–24.5%. In contrast, the high-oxygen specimens primarily display localized single necking, with δ₅ decreasing to 15.2%–18.7%. Oxygen promotes strain localization and alters the plastic instability mode by suppressing twin-mediated deformation and reducing local dynamic hardening capacity. Under low-oxygen conditions, the samples prepared from the 53–106 μm medium powder demonstrate the minimum porosity and optimal deformation coordination ability for multiple necking. Based on these findings, a cryogenic plasticity margin evaluation method characterized by the number of necking sites, necking transfer ratio, and quasi-homogeneous deformation length is proposed.