Recent studies showed that the microstructure and mechanical properties of aluminum based nanocomposites can be significantly improved when ultrasonic cavitation and solidification processing is used. This is because ultrasonic cavitation processing plays an important role not only in degassing and dispersion of the nanoparticles, but also in breaking up the dendritic grains and refining the as-cast microstructure.In the present study, A356 alloy and Al2O3 nanoparticles are used as the matrix alloy and the reinforcement, respectively. Nanoparticles were added into the molten A356 alloy and dispersed via ultrasonic cavitation processing. Ultrasonic cavitation was applied over various temperature ranges during molten alloy cooling and solidification to investigate the grain structure formation and the nanoparticle dispersion behavior. Optical Microscopy and Scanning Electron Microscopy were used to investigate in detail the differences in the microstructure characteristics and the nanoparticle distribution. Experimental results indicated that the ultrasonic cavitation processing and Al2O3 nanoparticles play an important role for microstructure refinement. In addition, it was shown in this study that the Al2O3 nanoparticles modified the eutectic phase.