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In this research, aluminum alloy (A356.1) matrix composites reinforced with 1.5, 2.5 and 5vol% nano-particle MgO were fabricated via stir casting method. Fabrication was performed at various casting temperatures, viz. 800, 850 and 950°C. Optimum amount of reinforcement and casting temperature were determined by evaluating the density, microstructure and mechanical properties of composites. The composites were characterized by scanning electron microscopy (SEM) and X-ray diffraction (XRD). Hardness and compression tests were carried out in order to identify mechanical properties. The results reveal that the composites containing 1.5vol% reinforcement particle fabricated at 850°C have homogenous microstructure as well as improved mechanical properties.