Fabrication and characterization of cast Al-2Mg alloy matrix composites reinforced with short steel fibers are dealt with in the present study. Three types of steel fiber were used: uncoated, copper coated and nickel coated. All the composites were prepared by the liquid metal route using vortex methods. When tested in tension, all composites exhibited improvement in strength due to high relative strength of steel fibers. The ductility was lowered except for the composite with copper coated fibers. Copper coated fiber reinforced composites gave the highest strength. Higher strength accompanied with appreciable ductility demonstrated by composites with copper coated fibers is attributed to the solid solution and fiber strengthening as well as good bonding at the interface. Composites reinforced with uncoated and Ni coated steel fibers did not exhibit strengthening to the level exhibited with copper coated fibers because brittle intermetallic phases are formed at the interface. These phases promote initiation and facilitate propagation of cracks. The observed fracture mechanism of composites was dimple formation, fiber breakage and pullout of fibers. Fracture surface of uncoated and Ni coated composites showed extensive pull out of fibers as well as fiber breakage confirming the above inference. In case of the copper coated composites dimple formation and coalescence was more extensive. EDX analysis showed a build up Cu, Ni, and Fe at the interface.