A new beta-Mg-12 wt%Li matrix composite reinforced with 15 wt%YAl2 particulates is produced. Microstructures and mechanical properties of the YAl(2)p/beta-Mg-Li composite were investigated. The results show that a clean interface is formed between YAl2 particulate and magnesium-lithium matrix; YAl2 particulates are dispersively distributed in Mg-12 wt%Li alloy matrix; and mechanical properties of the beta-Mg-Li alloy are effectively improved by the addition of YAl2 particulates.