Room-temperature yield strength of powder-metallurgy Al-ceramic particle composite alloys produced by mechanical alloying was analyzed from a viewpoint of microstructure which was characterized by several features: high dislocation density (in the order of 10¹⁴ m^–2), uniform dispersion of fine Al₄C₃ and Al₂O₃ particles (35 nm in size) and coarse ceramic particles (0.4-1.0 μm), and small grain size (0.5 μm). A large portion (more than 80%) of yield strength was concluded to be contributed through dispersion hardening by the fine particles and particle reinforcing by the coarse particles; the contribution was greater through the former mechanism than through the latter one for a given volume fraction of particles. The former mechanism was based on detaching pinned-down dislocations at the fine particles from them, and the latter one on restricting matrix deformation by mechanical constraint around the coarse particles. Impurities in the Al matrix made a modest contribution to strength, probably through solution hardening. These mechanisms raised the strength additively. Work hardening due to a high density of dislocations introduced during processing and grain boundary strengthening due to small grain size were considered not to be principal mechanisms for determining the yield strength.