AlSi10Mg has a good forming ability and has been widely accepted as an optimal material for selective laser melting (SLM). However, the strength and elongation of unmodified AlSi10Mg are insufficient, which limits its application in the space industry. In this paper, yttrium oxide (Y2O3) nanoparticles modified AlSi10Mg composites that were manufactured using SLM. The effects of Y2O3 nanoparticles (0~2 wt.% addition) on the microstructure and mechanical properties of AlSi10Mg alloys were investigated. An ultimate tensile strength of 500.3 MPa, a yield strength of 322.3 MPa, an elongation of 9.7%, a good friction coefficient of 0.43, and a wear rate of (3.40 ± 0.09) ×10−4 mm3·N−1·m−1 were obtained with the addition of 0.5 wt.% Y2O3 nanoparticles, and all these parameters were higher than those of the SLMed AlSi10Mg alloy. The microhardness of the composite with 1.0 wt.% Y2O3 reached 145.6 HV0.1, which is an increase of approximately 22% compared to the unreinforced AlSi10Mg. The improvement of tensile properties can mainly be attributed to Orowan strengthening, fine grain strengthening, and load-bearing strengthening. The results show that adding an appropriate amount of Y2O3 nanoparticles can significantly improve the properties of the SLMed AlSi10Mg alloy.