Growing interest in nanomaterials has raised many questions regarding the operating mechanisms active during the deformation and failure of nanoscale materials. To address this, a simple, effective in situ TEM straining technique was developed that provides direct detailed observations of the active deformation mechanisms at a length scale relevant to most nanomaterials. The capabilities of this new straining structure are highlighted with initial results in pulsed laser deposited (PLD) Al-Al2O3 thin films of uniform thickness. The Al-Al2O3 system was chosen for investigation, as the grain size can be tailored via deposition and annealing conditions and the active mechanisms in the binary system can be compared to previous studies in PLD Ni and evaporated Al films. PLD Al-Al2O3 free-standing films of various oxide concentrations and different thermal histories were produced and characterized in terms of average grain and particle sizes. Preliminary in situ TEM straining experiments show intergranular failure for films with 5 vol% Al2O3. Further work is in progress to explore and understand the active deformation and failure mechanisms, as well as the dependence of mechanisms on processing routes.