Displacement reaction constitutes a novel and specialized reaction-induced processing technique which allows the fabrication of a composite in net-shape. Composite containing alpha -Al2O3 and Al, in which both the phases are continuous, were formed by a displacement reaction between silica shapes and molten aluminium isothermally at temperatures between 1173 and 1573 K. Soaking periods varied between 0.2 and 48 h at each of these peak temperatures. The course of reaction was followed by microstructure evaluation of the products as observed at different time intervals of reaction processing. These specimens were analysed for phase evolution by XRD, extent of reaction and microstructure by optical microscopy and composition profile across the reaction zone by electron probe microanalyzer (EPMA). The product obtained on completion of reaction consisted of 74% alpha -Al2O3 and 26% Al (Si) by volume, and the phase were co-continuous. Grain size of % alpha -Al2O3 increased with an increase in forming temperature. The remarkable features of this forming technique are that the product has the same shape as that of the silica preform and it undergoes an isotropic linear shrinkage of barely over 1%. The formation of the composite and the microstructure evolution are discussed. Some properties of the product are presented.