In this study, Al-CeO2 nanocomposites containing various concentrations of reinforcement were fabricated by ball milling and microwave sintering process. A comparison of structural and mechanical properties of the developed nanocomposites is presented to elucidate the effect of reinforcement. Different characterizing tools such as X-ray diffractometer (XRD), field emission scanning electron microscope (FESEM), surface profilometrer, microhardness tester and universal compression testing machines were employed. XRD and SEM/EDX analyses reveal the presence and uniform distribution of CeO2 nanoparticles into the Al matrix. A significant increase in microhardness and compressive strength is noticed with increasing concentration of CeO2 nanoparticles due to a dispersion hardening effect of the reinforcement. Our study indicates that the concentration of reinforcement has a significant influence of the properties of Al-CeO2 nanocomposites. It is further noticed that Al-2.0 vol.% CeO2 nanocomposite demonstrates the best performance as compared to pure Al and other developed nanocomposites.