The invention provides Al.sub.2O.sub.3 dispersion-strengthened Ti.sub.2AlN composites, wherein Ti.sub.2AlN matrix and Al.sub.2O.sub.3 strengthening phase both are reactively formed in situ. The volume fraction of Al.sub.2O.sub.3 is 5% to 50%; the particle size of Al.sub.2O.sub.3 ranges from 500 nm to 2 .mu.m, with the mean size of Al.sub.2O.sub.3 particles about 0.8 .mu.m to 1.2 .mu.m; the shape of Ti.sub.2AlN grain is plate-like about 80 nm to 120 nm thick and 0.5 .mu.m to 2 .mu.m long. The composites exhibit excellent deformability at high temperature under compression and flexure stresses, and possess excellent oxidation resistance at 1100.degree. C. to 1350.degree. C. for long time (100 h). The composites show typical metallic conductor behavior and the electrical resistivity at room temperature is 0.3 to 0.8 .mu..OMEGA.m. The invention also provides a method for preparing the same: First, nanoparticles in Ti--Al binary system were prepared in continuous way by hydrogen plasma-metal reaction (HPMR) using Ti--Al alloy rods with Al content 20% to 60% by atom, or pure Al rods and pure Ti rods. The atmosphere used in HPMR is the mixture atmosphere of nitrogen-containing gas, H.sub.2 and Ar, with total pressure of 0.8 to 1.2 atm, wherein volume ratio of H.sub.2 and Ar is 1:0.8-1.2, and volume fraction of nitrogen-containing gas is 0 to about 20%. Second, the nanoparticles were compacted by vacuum hot pressing at temperature of 800.degree. C. to 1200.degree. C., pressure of 40 MPa to 60 MPa, time of 4 h to 6 h, and vacuum of 2.times.10.sup.-2 Pa to 5.times.10.sup.-3 Pa.