A new composite with cobalt ferrite magnetic nanoparticle dispersed in an aluminum matrix has been prepared using the ball-milling technique followed by compaction and sintering. Our efforts were largely focused on investigating the contribution of cobalt ferrite to the enhancement of structural, mechanical and magnetic properties of aluminum. Incorporation of 1-10 weight (wt)% of nanosized cobalt ferrite into the aluminum matrix could affect remarkable change in mechanical properties. Enhancement of hardness value, elastic modulus, and compressive strength was observed in the case of cobalt ferrite-incorporated aluminum matrix as compared to the pure aluminum sample. Incorporation of cobalt ferrite could impart considerable improvement of magnetization value of the aluminum matrix with a saturation magnetization of 17.07 emu/g for the aluminum sample reinforced with 10 wt% of cobalt ferrite. A decrease in coercive force in the sample arising from the increase in surface effects and inter-particle interaction between the ferromagnetic cobalt ferrite and soft phases in the matrix was also observed.