Novel structures of TiC/TiAl2/carbon nanofiber (CNF) hybrid reinforcements with attached magnesium oxide (MgO) particles were successfully fabricated in the matrix of the Mg alloy AZ91 (Mg 9wt%, Al 1wt%, Zn) composite. This was done using a novel liquid pressing process, coupled with in situ reactions between titanium dioxide (TiO2)-coated CNFs and the Mg alloy. Homogeneously dispersed hybrid reinforcement with strong interfacial bonding through TiC/TiAl2, led to dramatic improvement in the mechanical properties of AZ91 alloys, with the assistance of an anchoring effect by MgO particles chemically attached to the coating layer.