The effect of Mg content on the microstructure and mechanical properties of Al-xMg/5 wt.% Al2O3 (x = 0, 5, 10 and 20 wt.%) powder mixtures during milling was investigated. For the binary Al-Mg matrix, the predominant phase was an Al-Mg solid solution. With the increment of Mg to 20 wt.% the crystallite sizes of 20 h milled powders diminish from 47 to 21 nm and lattice strains increase from 0.45 to 0.9% caused by Mg atomic penetration into the substitutional sites of the Al lattice. At the same condition an increase in lattice parameter was observed due to solid solution formation and grain refinement. With up to 20 wt.% Mg (for 20 h milled composites) microhardness increases from 118 to 218 HV caused by the increment of the Mg concentration and dislocation density as well as the decrease of the crystallite size. (C) 2012 Elsevier B.V. All rights reserved.