Carbon nanotube (CNT)-reinforced aluminum composite powders were synthesized by cryogenic milling. The effects of different milling parameters and CNT contents on the structural characteristics and mechanical properties of the resulting composite powders were studied. Detailed information on powder morphology and the dispersion and structural integrity of the CNTs is crucial for many powder consolidation methods, particularly cold spray, which is increasingly utilized to fabricate metal-based nanocomposites. While all of the produced composite powders exhibited particle sizes suitable for spray applications, it was found that with increasing CNT content, the average particle size decreased and the size distribution became narrower. The dispersion of CNTs improved with milling time and helped to maintain a small Al grain size during cryogenic milling. Although extensive milling allowed for substantial grain size reduction, the process caused notable CNT degradation, leading to a deterioration of the mechanical properties of the resulting composite.