Addition of Gd to Al-15Mg2Si composites modified the morphology of Mg2Si particles. Addition of Gd to Al-15Mg2Si resulted in the formation of MgGd compound. Addition of 0.5 wt% of Gd resulted in the highest strength of the composites. Fine lamellar morphology of MgGd and polyhedral shape of Mg2Si enhanced mechanical properties.