In this paper, effect of AlCl3 addition as process control agent (PCA) during high energy ball milling of Al and TiO2 powder mixture was studied. This mechanical activation is aimed at to synthesize an ultra fine grained TiAl/Al2O3 composite. Experimental results show that AlCl3 significantly prevents severe cold welding of Al particles to milling media. Sublimation of this compound by local temperature increase due to balls collisions seems to be the main reason in prevention of severe cold welding. Samples were characterized by XRD, SEM and DTA. Mean crystallite sizes in particles of this sample and those milled with no PCA and milled with stearic acid were calculated and the results showed that smaller crystallite size is obtained in presence of AlCl3. However, DTA results revealed that addition of AlCl3, shifts aluminothermic reduction of TiO2 by Al to higher temperatures and therefore, final composite phases form at higher temperatures. Phase evolutions during further heat treatment of the powder sample milled with AlCl3 were also thoroughly studied.