Determination of residual stresses in metals, subjected to secondary processing, is necessary from the point of view of their applications and is widely studied in literature. However, residual stresses induced during service is generally ignored when evaluating the performance of the component. The residual stress in a component could be tensile or compressive in nature and eventually affects its service life under external loading. In this regard, industries demand rapid, efficient, and easier methods of non-destructive testing to identify and control the residual stress in such components. The present work aims at evaluation of residual stress in an LM-25 aluminium alloy/fly Ash Metal Matrix Composites (AMC) after subjecting the specimen to dry sliding wear tests. X-ray diffraction technique was used to measure the residual stress in the “pin” specimen of the pin-on-disc set-up. The residual stress was ~ 24 % higher in the composite compared to the un-reinforced alloy after the wear test while the wear rate, measured in terms of weight loss of the pin, was lower by about 50%, under similar test conditions.