For the purpose of improving the wettability of ceramic reinforcement phases when heated in molten metal as well as improving particle reinforced metal matrix composite performance, electroless nickel plating was used to synthesize modified Al2O3@Ni powders for laser cladding. The results showed that a thin nickel shell uniformly covered the surface of the Al2O3 powders with a thickness of about 1.5 μm. It was shown that pretreatment significantly affects obtaining a complete and uniform nickel layer after nickel deposition. The composite coatings of Al2O3-316 L and Al2O3@Ni-316 L were prepared by laser cladding, respectively. The results showed that both of the microhardness of Al2O3@Ni-316 L cladding layers is higher (449.9HV0.05) than that of Al2O3-316 L (384.2HV0.05), the friction coefficient and wear rate of Al2O3-316 L are much lower than that of Al2O3@Ni-316 L cladding layer. The results indicated that Ni-coated Al2O3 powders could reduce the defects and obtain cladding coatings of high quality.