TiAl/Al2O3 in situ composites have been prepared by a reactive hot pressing method from Ti, Al and Nb2O5 powders. The phase transformation and the mechanism of synthesis were studied by differential scanning calorimeter (DSC) of starting powers and X-ray diffraction (XRD) of samples hot press sintered at different temperatures from 500 °C to 1300 °C. Scanning electron microscopy (SEM) coupled with energy-dispersive spectroscopy (EDS) was utilized to investigate the morphology characteristics of the products. The resultant in situ formed TiAl/Al2O3 composites exhibited multiplex structures containing TiAl, Ti3Al, Al2O3 and NbAl3 phases. Fine Al2O3 particles that act as reinforcing phase are dispersed along the interface of the matrix. The formation of TiAl/Al2O3 composite involves many transitional stages. Firstly, Ti and Al reacted to form TiAl3 and Ti3Al intermediates, then Nb2O5 was reduced by Al to form the Al2O3, and finally, the competitive solid-state diffusing reactions among Ti3Al, TiAl and TiAl3 produced the final matrix phases of the resultant composite.