In-situ (Al2O3+Al3Zr)p/A356 composites were synthesized by melt reaction technology and the effects of yttrium on microstructure and mechanical properties of the composites are investigated. The results indicate that the reinforced particulates Al2O3 and Al3Zr become smaller in size with yttrium addition, the sizes are about 0.5~2μm. The distribution becomes more homogeneous, the morphologies are spheroid-shape and ellipsoid-shape, the ambitus is blunt. The mechanical properties test results show the mechanical properties of the composites are greatly enhanced. With 0.4wt.% yttrium addition, the ultimate tensile strength and yield strength of the composites reach to 388MPa and 296MPa, which are increased 35.6% and 37.0% comparing with no yttrium addition, respectively. The effect mechanisms of yttrium are discussed.