A novel in-situ reaction system Al-Zr-O was developed. In-situ Al3Zr and Al2O3 particulates reinforced aluminum matrix composites were fabricated by the direct melt reaction technique in the Al-Zr-O system. Microstructures of the composites and crystal morphology of in-situ formed Al3Zr and Al2O3 particulates were analyzed by scanning electron microscope（SEM） and transmission electron microscope（TEM）. Results indicate that in-situ formed Al3Zr and Al2O3 particles are finer and well distributed in aluminum matrix. Al3Zr particulates with a tetragonal structure are mainly in the shape of polyhedron. A few of them are in the form of rectangle. The length/width ratio of the rectangular Al3Zr is less than 2.0 and the maximum size is 2 μm. In addition, a certain number of Al2O3 submicro particles with a hexagonal structure are also generated in this system. Furthermore, it is found that Al3Zr crystal grows by the mechanism of twinning. The twin plane is （11-4-）. The twinning direction is [221].The tensile tests show that the composites synthesized in the Al-Zr-O system exhibits high strength and ductility. There are a lot of ripples with fine particles on the fracture. The principal strengthening mechanisms for （Al3Zr+Al2O3）p/Al composites may include Orowan strengthening, grain-refining strengthening, solid-solution strengthening and dislocation strengthening.
