AZ91 magnesium matrix composite was fabricated by squeeze infiltration process. The aluminum silicate short fibers were used as reinforcement, and aluminum phosphate was adopted as binder, fabricating process was improved as well as reducing fabricating cost effectively. The optimum technique of squeeze casting, that was, preform-body temperature of 6600C, mould temperature of 5600C, pouring temperature of 7600C and pressure of 30~50MPa. The reaction products were investigated by optical microscopic, XRD and SEM. The results show that an ideal stronger interface is formed by the chemical reaction between magnesium alloy matrix and aluminum phosphate binder due to the produce of MgO particles and a little MgAl2O4 particles in the interface. AZ91 magnesium matrix composite is well-organized, and its grain size is significantly smaller than that of the matrix. The structure of AZ91 magnesium matrix composite is uniform without casting defects such as shrinkages and inclusions.