In the present study the effect of Mg addition on the characteristics of Al/SiC nanocomposite powder particles produced via a relatively new method called in situ powder metallurgy (IPM) is investigated. Commercially pure Al and Al-Mg alloy melts containing different amounts of Mg were used as the matrix alloy. Nano-sized SiC particles with the average size of 60 nm were used as the reinforcing material. The effect of Mg content on the fluidity of the melt as an influencing factor affecting both the process yield and wettability of SiC with molten metal was investigated. The size distribution of produced powders was characterized using a laser particle size analyzer. Scanning electron microscopy was utilized to investigate the possibility of embedding of SiC nanoparticles within the metallic matrix. Results of microhardness measurements together with SEM micrographs and EDS analysis showed that nano-sized SiC particles could be embedded in the relatively coarse Al-Mg powders containing at least 1 wt.% Mg.