To avoid the disadvantages resulting from the interface between matrix and reinforcement for metal matrix composites (MMCs), a novel in-situ synthesizing technology, based on powder metallurgy, is presented in this paper. A kind of aluminum matrix composite reinforced by in-situ intermetallic compound fiber was prepared. The results showed that in-situ fiber was distributed uniformly in matrix, parallel to the extrusion direction. Yield strength of in-situ MMCs is 28% and 95.7% higher, respectively than those of ex-situ MMCs and matrix aluminum, and fracture strength is increased by 20.6% and 88.5% correspondingly. The strengthening mechanism of in-situ MMCs is that the excellent interface bonding between the matrix and the reinforcement. The matrix exhibits its strong strength, and the reinforcement exhibits its strong strength. The fracture mechanism of in-situ MMCs is the brittle fracture and cleavage crack of fibers.