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A sophisticated understanding of phase transformations and microstructure evolution is crucial in mechanical property optimization for the newly developed low-cost Ti-35421 (Ti-3Al-5Mo-4Cr-2Zr-1Fe wt.%) titanium alloy. The phase transformations in dual-phase Ti-35421 were studied by experiments and thermo-kinetic modeling. The phase transformation reactions and temperature ranges were determined as β→α_lamellar [410−660 °C], α_lamellar→β [660−740 °C], α_lath→β [740−825 °C]. The Gibbs-Thomson effect and multicomponent diffusivities were proven to be responsible for the distinguishing behaviors of growth and dissolution between two α phases. The aging temperature of 540 °C was optimized based on calculations. It introduced a bimodal microstructure containing stubby α lamellae and β matrix. The mechanical properties of bimodal Ti-35421 were tested and compared with baseline alloy Ti-B19 and other near-β titanium alloys. The 540 °C aged alloy exhibits an optimal combination of mechanical properties with tensile strength of 1313 MPa, yield strength of 1240 MPa, elongation of 8.62%, and fracture toughness of 75.8 MPa·m^1/2. The bimodal Ti-35421 shows comparable performance to Ti-B19 but has lower cost in raw materials and processing. The results also demonstrate that thermo-kinetic modeling can effectively be utilized in tailoring microstructure and enhancing mechanical properties.