A dispersion of TiB2 particulates in an Al alloy matrix was formed via the in-situ reaction between mixtures of K2TiF6 (K2ZrF6), KBF4 and molten aluminium. The dispersion of the ceramic phase in the aluminium matrix was also achieved in some experiments by adding exogenous TiB2 particles to the fluoride melt in contact with molten aluminium. In this work, we have examined the microstructure of the as-cast metal matrix composites using analytical electron microscopy and X-ray diffraction techniques. The phases formed as a result of the reaction between the molten fluoride flux and liquid aluminium have been identified. These were (Ti, Zr, Al)B2, Al3Ti and possibly AlB12 in the Al-matrix, and KAlF4 and KMgF3 in the solidified flux. The mechanism of formation of TiB2 and Al3Ti is explained. The role of alloying elements is also explained in the context of interfacial chemistry and dispersion.