Numerous investigations have been performed to develop alloys suitable for aerospace industry. For some aerospace and automotive applications lightweight alloys which can operate at high temperatures for long periods are required. Aluminium composite reinforced with the intermetallic particles, are the most important materials in this field. Addition of zirconium to aluminium can produce zirconium trialuminide (Al 3 Zr) intermetallic compound which can improve the strength of Al at elevated temperature due to the very slow coarsening rate. The aim of this work was to produce bulk nanostructured Al-Al 3 Zr by mechanical alloying (MA) and subsequent hot extrusion and to investigate the properties of bulk samples. For this purpose, the Al 3 Zr powders were produced by mechanical alloying (MA) of elemental Al and Zr powders with ball mill. Al 3 Zr powder was then mixed with pure aluminium to prepare Al-Al 3 Zr composite with different weight percent of reinforcement (Al 3 Zr). This powder was consolidated by hot extrusion method at 550?C and then the properties of samples were evaluated. The microstructural changes were studied using X-ray diffraction (XRD), scanning electron microscopy (SEM) and transition electron microscopy (TEM). The mechanical properties of consolidated samples were evaluated by hardness and tension tests at room temperature and high temperatures. In order to study the wear behavior of material, pin on disk wear test was performed on consolidated samples under loads of 27 and 40N at room temperature. The results showed that after 50 hr of MA, no new phase was observed in powder mixtures. After heat treatment of mechanically alloyed powder at 600?C for 1 hr, Al 3 Zr was formed. The differential scanning calorimetry results showed that production of Al 3 Zr began with nucleation of a metastable phase which then transforms to the stable tetragonal Al 3 Zr. The grain size of Al 3 Zr was meatured to be 32 nm. By hot extrusion of MA powders it was possible to produce bulk samples with a relative density of about 99% and uniform distribution of reinforcement in the matrix. The tension yield strength of Al-10%wt Al 3 Zr was determined to be 105 MPa which are much higher than that for pure Aluminium (60 MPa). The tension test behavior of samples in 300?C showed that the presence of reinforcement in structure prevented the recrystallization. At temperature of 300?C the yield stress of Al-10%wt Al 3 Zr was about 95 MPa. The room temperature hardness of Al-Al 3 Zr composite remained unchanged after annealing at 300?C for 36 hr confirming high thermal stability of the material. Wear test results showed that the wear rate decreases by increasing the volume fraction of reinforcement in the composites. The predominant mechanisms of wear depends on applied force and change from the formation of mechanical mixed layer to abrasive and then delamination with increasing force. Keywords : Aluminium matrix composite, Al 3 Zr, Nanostructure material, Mechanical alloying, Hot extrution