In this investigation, an attempt was made to develop a new high-strength and high-ductility aluminum metal–matrix composite. It was achieved by incorporating ceramic reinforcement into the metal which was formed in situ from a polymer by pyrolysis. A crosslinked PMHS polymer was introduced into commercially pure aluminum via friction stir processing (FSP). The distributed micro- and nano-sized polymer was then converted into ceramic particles by heating at 500 °C for 10 h and processed again via FSP. The produced composite showed a 2.5-fold increase in yield strength (to 119 MPa from 48 MPa) and 3.5-fold increase in tensile strength (to 286 MPa from 82 MPa) with respect to the base metal. The ductility was marginally reduced from 40% to 30%. The increase in strength is attributed to the grain refinement and the larger ceramic particles. High-temperature grain stability was obtained, with minimal loss to mechanical properties, up to 500 °C due to the Zenner pinning effect of the nano-sized ceramic particles at the grain boundaries. Fractures took place throughout the matrix up to 300 °C. Above 300 °C, the interfacial bonding between the particle and matrix became weak, and fractures took place at the particle–matrix interface.