In this study, composites based on Al-Mg/Al2O3 formulation were fabricated using an innovative solidification route followed by hot extrusion. The studies clearly indicate an increase in retention of nanometric alumina with an increase in magnesium content. Microstructural characterization studies of the extruded composite samples displayed fairly uniform distribution of reinforcement phases and minimal porosity. Results of mechanical properties characterization showed that a cumulative increase in magnesium and nanometric alumina content led to an increase in elastic modulus, 0.2% YS and UTS while the ductility of the composite was adversely affected. A comparison between monolithic Al-3.8Mg and Al-3.4Mg/1.4Al2O3 revealed that the presence of nanometric alumina play a dominant role in realizing a significant increase in elastic modulus, 0.2%YS and UTS of the composites.