Al alloy matrix composite with TiNi shape memory fiber as reinforcement has been fabricated by hot pressing to investigate microstructures and mechanical properties. The analysis of SEM and EDS showed that the composites have shown good interface bonding. The stress-strain behavior of the composites was evaluated at temperatures between 363K and room temperature as a function of prestrain, and it showed that the yield stress at 363K was higher than that of the room temperature. Especially, the yield stress of this composite increases with increasing the amount of prestrain, and it also depends on the volume fraction of fiber and heat treatment. The smartness of the composite is given due to the shape memory effect of the TiNi fiber which generates compressive residual stress in the matrix material when heated after being prestrained. Microstructural observation has revealed that interfacial reactions occur between the matrix and fiber, creating two intermetallic layers.