High-temperature structural composites being developed today use matrix materials and reinforcing phases which are rarely at thermodynamic equilibrium. The use of coatings to protect the reinforcing phase from deteriorating reactions at the interface adds processing and manufacturing costs. If structural composites are to be synthesized competitively, we must find in-situ process that can produce thermodynamically stable interfaces between the matrix and the reinforcement, One such process being developed is via the ternary solid-state displacement reactions. In this paper, we discuss the applications of thermodynamics, mass balance, and kinetics to the synthesis of in-situ composites through solid-state reactions. The proper choice of starting materials, the principles governing the diffusion paths, and the formation of desirable microstructures are discussed. We also demonstrate the use of the stability diagrams for rationalizing diffusion and reactions during composite synthesis. Applying these principles to the synthesis of NbSi2/SiC composites, we show that the proper starting materials are NbC1-x and Si. The probable microstructure is an aggregate-type, composed of NbSi2 and SiC. Preliminary experimental results of the study of bulk NbC1-x/Si diffusion couples annealed at 1300 degrees C for 60 hours reveal that the microstructure is indeed a two-phase mixture of NbSi2 and SiC. Discontinuous SiC particles with an average size of one micron are homogeneously dispersed in the NbSi2 matrix. This microstructure is considered favorable for high-temperature structural applications.