Extrinsically toughened discontinuously reinforced aluminum composites are processed with the objective of enhancing damage tolerance of conventional particle reinforced aluminum composites. The approach consists of producing a composite microstructure in which discrete ductile phases have been incorporated into the particle reinforced metal matrix via traditional powder processing routes. The present study focuses on investigating the effects of volume fraction and flow strength of the ductile phase reinforcements in determining dynamic deformation and fracture characteristics of these extrinsically toughened composites. The dynamic compression behavior of the composites is examined by employing the split Hopkinson pressure bar. The measured dynamic stress–strain response of the composites is correlated with the macro- and micro-damage mechanisms inferred from post examination of the impacted specimens. The dynamic fracture characteristics of the composites are obtained by impact loading pre-cracked three point bend specimens in a modified Hopkinson bar apparatus. The measured load-point force versus load-point displacement curves are used to, (a) estimate the energy required for dynamic crack initiation, and (b) understand the interaction of the dynamically propagating crack tip with the ductile phase reinforcements. The results indicate that the extrinsically toughened DRA composites absorb significantly greater energy during the crack propagation as compared to the conventional DRA composites. Also, the level of extrinsic toughening introduced in the composites is affected by the location, volume fraction and mechanical properties of the ductile phase reinforcements. Amongst the relatively larger volume fraction ductile-phase reinforced composites, the ductile phase reinforcements comprising low flow strength commercial purity aluminum fail primarily in a ductile manner, whereas the ductile phase reinforcements comprising high strength Al alloy fail in a cleavage manner by inter-granular fracture.