In-situ preparation of particle reinforced Al matrix composites (PRAMCs) by laser powder bed fusion (LPBF) is a promising strategy to strengthen Al-based alloys. The laser-driven thermite reaction can be a practical mechanism to in-situ synthesise PRAMCs. However, the introduction of elements oxygen by adding Fe2O3 makes the powder mixture highly sensitive to form porosity and Al2O3 film during LPBF, bringing challenges to prepare dense materials. This work develops an LPBF processing strategy combined with consecutive high-energy laser melting scanning and low-energy laser remelting scanning to prepare dense PRAMCs from Fe2O3/AlSi12 powder mixture. A high relative density (98.2 ± 0.55 %) was successfully obtained by optimising laser melting (Emelting) and remelting energy density (Eremelting) to Emelting = 35 J/mm2 and Eremelting = 5 J/mm2. Results reveal the necessity to increase Emelting to improve metal liquid’s spreading/wetting by breaking up Al2O3 films surrounding molten pools; however, the high-energy laser melting produced much porosity. Low-energy laser remelting could close the resulting internal pores, backfill open gaps and smoothen solidified surfaces. Although with two-times laser scanning, the microstructure still shows fine cellular Si networks with Al grains inside (grain size 370 nm) and in-situ nano-precipitates (Al2O3, Si and Al-Fe(-Si) intermetallics). Finally, the fine microstructure, nano-structured dispersion strengthening and high-level densification strengthen the prepared in-situ PRAMCs, reaching yield strength of 426 ± 4 MPa and tensile strength of 473 ± 6 MPa. Furthermore, the results can provide valuable information to process other powder mixtures with severe porosity/oxide-film formation potential considering the evidenced contribution of laser melting/remelting strategy to densify material and obtain good mechanical properties during LPBF.