Hot isostatic pressed (HIPed) nickel-based superalloy FGH4096 behaves a unique flow behavior in hot compression process due to the formation of necklace microstructure and leads to its characteristic dynamic recrystallization (DRX). In this process, dislocations activate the occurrence of DRX at prior particle boundaries (PPB) and the PPB is entirely covered with DRX grains, which forms the first layer in necklace structure. In this paper, two nucleation mechanisms, viz., bulge corrugation (BC) nucleation and dislocation induce phase (DIP) nucleation, are proposed. Based on the proposed mechanisms, the recrystallization firstly occurs in PPB via BC mechanism. The DIP nucleation occurs when the hot plastic deformation is carried out at the temperature below the γ′ phase solution temperature. To verify the proposed mechanisms, hot compression experiments were conducted. The models are then verified based on the experiments. Furthermore, the recrystallization activation energy of 922kJ/mol is determined, which includes the growth energy and the two nucleation energies, viz., BC and DIP nucleation energies.