The current investigation is focused on the fabrication and characterization of Al2O3 reinforced AZ91 Magnesium (Mg) matrix composites. These lightweight and wear-resistant composites were developed by incorporating the varying Al2O3 reinforcement in weight percentages (wt% ages) into AZ91 Mg matrix alloy using stir casting technique in conjunction with ultrasonic agitations with optimal conditions. The effects of varying wt% of reinforcements on the composite's particle distribution, matrix-particle interfacial reaction, microstructure, mechanical and tribological attributes were investigated. The tribological performance of base matrix alloy and the developed composites was examined using a friction and wear apparatus. The analysis using SEM, OM, and XRD were accomplished to investigate the surface morphology, microstructure, and phase changes of base matrix alloy and the developed composites. The mechanical characterization shows that the insertion of Al2O3 particulates prompted the simultaneous enhancement in microhardness, impact strength, and indentation fracture toughness. The homogeneous dispersion of fine particles caused by the ultrasonic agitations was credited with improving wear resistance. The wear tracks were formed on the worn specimen by adhesion, oxidation, erosion of soft AZ91 magnesium matrix, and the delamination when assessing sliding wear, as revealed by the micro-structural investigation. The eruption of base matrix and the pull-out of the particles have both contributed to the material removal. The addition of reinforcement above a certain limit led to the agglomeration, clustering, and uneven distribution of particles, which resulted in the deterioration in impact toughness and the wear-resistance of the composite.