Adopting a novel synthesizing method-low temperature reaction melting (LRM), a MgO particulate reinforced magnesium matrix composite was in-situ fabricated using pre-oxidized Mg powders. The microstructures and mechanical properties of the composite were investigated by microstructure observation and tensile tests. The results showed that, due to the melting of Mg powders during LRM treatment, the oxide film on the surface of Mg powder was effectively broken into pieces, refined and subsequently, spheroidized into particulates with micron or sub-micron sizes by the joint effect of the liquid phase Mg and the surface tension of MgO itself. Moreover, The formed MgO particulates possess not only good interfacial bonding with the matrix and uniform distribution, but also high strength and stiffness, which is beneficial to improving the reinforcement effect to the matrix. As a result, the LRM method can bring better microstructures and mechanical properties to the composite compared to powder metallurgy process.