Charged alumina fine particles (80 nm) easily agglomerated into larger particles with an average diameter about 1109 nm in a well-stirred concentrated Watts bath. However, the average diameter of the agglomerated particles could be easily reduced to 162 nm and 318 nm, respectively, by means of physical dispersion through the application of supersonic energy, and by means of chemical dispersion through the addition of surfactants to this electrolyte. The volume content of alumina particles in the electrochemical composite coating depended on the dispersal effect of alumina particles in the electrolyte. Although the applied supersonic energy in the Watts bath electrolyte had a better dispersion effect than the added surfactants did, the cationic surfactant CTAB adsorbed chemically onto the alumina particles promoted the attractive force between the agglomerates and the cathode surface, as well as a higher volume content of alumina particles in the Ni-Al2O3 composite coating (6.8 vol%) was obtained. Better hardness (470 Hv) was also found in this composite coating.