Commercial pure aluminum was friction stir processed with Al-TiO2-graphite mixture pre-placed into a groove in Al. Two kinds of powders were used as starting particles for friction stir processing; as-mixed powder and 60-h ball-milled powder. Characterization by XRD, SEM and EDS analysis showed that with as-mixed powder an Al composite reinforced with Al3Ti and Al2O3 was produced. Graphite particles were remained in the matrix unchanged. Using 60-h ball-milled powder as starting particle in friction stir processing, resulted in an Al composite reinforced with TiC-Al2O3 nanoparticles dispersed uniformly into the matrix having the size of 100 nm on average. In this state, the microhardness values obtained in the stir zone were higher than those ones obtained using as-mixed powders. The mechanism of phases formation during friction stir processing with two different kinds of powders are elaborated and discussed in this study. Also the mechanical properties of samples were investigated.