Powder metallurgy processing of aluminum alloy based metal matrix composites (MMC) is realized to be a promising alternative as expected to advance rapidly compared to other conventional methods. This paper reviews the extensive development in metal–matrix composite research works with particular focus on aluminum alloys 2xxx series as metal–matrix particulates processed by powder metallurgy route. Effect of reinforcement materials such as SiC and Al2O3 on the mechanical properties of the composites manufactured through conventional methods and powder metallurgy route are compared and presented. The influence of percentage of reinforcement material on the overall properties of the MMC's as reported by the researchers are presented. Summary on fundamental aspects of manufacturing MMC's via powder metallurgy route, the effect of mechanical properties, tribological properties, and microstructural properties are presented. Eventually, some advantages of powder metallurgy method are mentioned which may substantiate the claim to consider this as a novel method for near net shape manufacturing.