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The additions of magnesium to an aluminium alloy matrix, which contains insufficient magnesium, was found to be essential during the synthesis of composites by the stir-casting technique. Magnesium promotes interfacial wetting between the dispersoid surface and the matrix. Dispersion of SiCp in Al-7 Si-0.3 Mg (356) alloy matrix without agglomeration and rejection was not possible. Hence, the addition of up to 3 wt% Mg was made to the alloy matrix during the dispersion of 10 wt% SiCp (34 ?m), and the microstructure and mechanical properties of the composites were investigated with a view to optimize the magnesium content. With a magnesium content less than 1 wt% in the matrix, the SiCp particles were essentially in agglomerated form. The highest UTS of 280–300 MPa was obtained with 1 wt% Mg content and SiCp was uniformly distributed in the matrix. A higher magnesium content (>1.0 wt%) did not further improve the uniformity in the dispersion of SiCp but the ultimate tensile strength properties deteriorated. This decrease in strength was attributed to the observed coarseness of the Mg2Si phase, the precipitation of Mg5Al8 phase and the presence of a higher amount of porosity in the composites in the heat-treated condition. The aspect ratio (length/width) of precipitates changed from 1–3 for 1% Mg to 3–9 for 3.2% Mg in the matrix. Corresponding values for per cent porosity were 2% and 6%, respectively.