The mechanical properties and physical characteristics of aluminum alloy composites can be significantly improved by adding reinforcing phases. However, the high loading of the reinforcement phase in Al7075-Al2O3 composites has not been thoroughly studied. In this work, a combination of semisolid metal powder processing and powder metallurgy is used to process and manufacture Al7075-Al2O3 composites with a high reinforcement fraction of > 40 vol.%. The effects of processing parameters on the microstructures and mechanical properties of the composite material are discussed in detail. The loading limits of the high volume Al2O3 reinforcement in Al7075 composites are identified and linked to the processing parameters. A methodology is introduced to estimate the consolidation temperature of Al7075 alloy using compaction testing. Al2O3 particles (the average particle size of 120 µm) were mechanically milled with Al7075 powder (the average particle size of 20 µm) for 10 min and 5 h using a high-energy planetary ball mill. The mixture was then compacted in the semisolid state at 615 °C under the compaction pressures of 50 MPa and 100 MPa. By increasing the milling time from 10 min to 5 h, the deformation of aluminum powders and the fracture of Al2O3 reinforcement particles occur, restricting the loading limit of reinforcement. The milling time also shows a dominant effect on the powder morphology, microstructure, and mechanical properties of Al7075-Al2O3 composites. Increasing compaction pressure from 50 to 100 MPa significantly improved the compressive strength of the composite from 218 to 652 MPa. Al7075-Al2O3 composite with 40 vol.% of reinforcing phase exhibits the highest hardness of 198.2 HV and 96.9% relative density when it is milled for 5 h and compacted at 100 MPa. However, this composite shows the highest strength of 652 MPa when it is milled for 10 min. By increasing the reinforcing phase to 50 vol.% and 60 vol.%, the hardness, density, and compressive strength of composites decreased. The composites with 60 vol.% of reinforcing phase appeared overloaded. Results show that semisolid metal powder processing has huge potential for the fabrication of high loading Al2O3 in Al7075 matrix with near theoretical density.