In-situ generation of ceramic reinforcements during the manufacturing of metal matrix composites (MMCs) have wide advantages ranging from better dispersion, generation of nanoceramics to increased compatibility with matrix. The present work aims to explore the effect of precursor concentration on the in-situ generation of CeO2 and MgO particles in Mg-based MMC. The contribution of different strengthening mechanisms is also explored. Optical microscopy, Scanning electron microscope (SEM), Energy dispersive spectroscopy (EDS) analysis, and X-ray diffraction (XRD) of the developed MMCs lead to categorization of particles and features into cauliflower structure, agglomerated nanoceramics, composite ceramic particles (CCP), nanoceramics, nanopores and intermetallic. Vickers hardness tests, compression tests, and scratch tests are carried out to evaluate the mechanical response of MMCs. The compression fractured surfaces are analyzed using SEM. Preliminary wear response is evaluated using a 3-D optical profilometer to evaluate the scratched surfaces. The effect of particle size and concentration on various strengthening mechanisms is evaluated. It is possible to manipulate the mechanical properties through controlling the in-situ reinforcement type and distribution, which is also further possible, as reported here.