PURPOSE: To obtain a composite alloy having excellent ductility and fracture toughness by forming a preform with granulated powder of titania and impregnating the preform with an Al alloy under pressurization.

CONSTITUTION: The granulated powder is formed by using the titania particles and the preform formed of such granulated powder is impregnated under pressurization with the Al alloy. Further, the composite alloy is so treated that the region of the Al alloy in the composite alloy is 20 to 95vol.% over the entire part and the balance consists of a composite region of the solid or hollow spherical or irregular shaped titania particles and the Al alloy and that the titania particles are 30vol.% over the entire part of the composite alloy. The titania granulated particle to be used is preferably formed by using the titania particles and granulating these particles by a spray dry method or freeze-drying method. The composite alloy has not the excellent ductility and fracture toughness but also excellent processability as adequate hardness and strength are obtainable by changing the size, etc., of the titania granulated powder.