AbstractRapid evolution in engineering and manufacturing demands light weight material with enhanced mechanical properties. Aluminium metal matrix composites with ceramic reinforcement particulates serve this demand due to their reduced density, improved strength and hardness along with higher resistance to wear and corrosion. However, the material cost and reduced machinability hinders the full potential of utilization. To overcome these challenges, in this work cupola slag, an industrial waste generated as by product of cast iron production, has been incorporated as reinforcement of aluminium composites using low cost stir casting method. The enhancement of material properties and machinability by cupola slag inclusion on base alloy has been investigated in detail. Moreover, introspection about the underlying mechanisms responsible for the improvement in material properties has been studied using detailed microstructure and fractographic analysis. The results show improvement of in material properties and machinability up to 7 wt.–% cupola slag inclusion, beyond which the reduced wettablity prohibits sound castings. The ultimate tensile strength and specific strength observed to be improved by 18.20 % and 33.23 % respectively for 7 wt.–% slag reinforced composites when compared with base alloy. This work can be a successful addition to the knowledge pool of ongoing research on low‐cost novel material with enhanced properties.