The present investigation is on the microstructure evolution and hardness of powder metallurgically processed Al- 0.5 wt.%Mg base 10 wt.% short steel fiber reinforced composites. The 0.38 wt.% C short steel fibers of average diameter 50μm and 500-800μm length were nitrided and chromized in a fluid bed furnace. Nitriding was carried out at 525°C for 90, 30 and 5 min durations. Chromizing was performed at 950°C for 53 and 7 min durations, using thermal reactive deposition (TRD) and diffusion technique. The treated fibers and resulting reaction interfaces were characterized using metallographic, microhardness and XRD techniques.