Ball milling was utilized to make composite powders from either elemental Mo, Si, C powders or compound MoSi2 and SiC powders. The milled powders were hot-pressed in a vacuum furnace to produce 10 to 30 vol.% SiC-reinforced MoSi2 composites. The influence of microstructure on the indentation fracture toughness of the fabricated SiC/MoSi2 composites was investigated. The SiC particles present in the consolidated compound composite are larger than those in the elemental composite while the pores observed in the former composite are fewer than in the latter. The overall values of fracture toughness measured on the compound composites are higher than those of elemental composites. The major reason for the greater toughness of compound composites is due to the larger SiC particles and fewer pores in these materials.