The enhancement of mechanical properties in martensitic AISI 420 stainless steel is realized through the incorporation of TiN ceramic particles using the selective laser melting (SLM) method. This study introduces an innovative hybrid mixing method designed to uniformly disperse TiN within the AISI 420 matrix, ensuring the absence of agglomerations and contaminations in the feedstock for the SLM process. Employing a combined approach involving the Taguchi method, Grey Relational Analysis, and Principle Component Analysis, optimal processing parameters and TiN content are identified, encompassing a laser power of 350 W, laser speed of 370 mm/s, hatch distance of 0.07 mm, layer thickness of 0.05 mm, and one percent by weight of TiN particles. The optimized SLM sample showcases exceptional characteristics with a hardness of 743 ± 20 HV, tensile strength of 1822 ± 21 MPa, and a modulus of toughness of 99.7 ± 3.0 J/m3, surpassing existing results. Introducing TiN particles into the AISI 420 matrix with suitable SLM processing parameters induces significant microstructural alterations, reinforcing the matrix and elevating the mechanical properties. These results mark a substantial advancement in metal matrix composite materials by applying cutting-edge manufacturing techniques.