Al-alloyed MgB 2 was prepared by solid state reaction of Mg 1−x Al x alloy and crystalline B powder particles. The nominal composition of the samples was Mg 1−x Al x B 2 , with x = 0, 0.1, 0.2, and 0.3. Microstructure and chemical composition have been investigated by scanning electron microscopy (SEM), electron probe microanalysis (EPMA), and preliminary transmission electron microscopy (TEM). The Al concentration of the matrix is close to, but less than, the nominal Al concentration and the difference increases with increasing nominal Al concentration. Al is incorporated into MgB 2 grains of ∼1 µm size by substitution of Mg lattice sites with Al. Al was found to be distributed inhomogeneously, which partially explains the broadening of the superconducting transition width ( T c ) with increasing Al mole fraction. Al-alloyed samples contain large (∼15 µm) and small (∼2 µm) secondary phases embedded in the (Mg, Al)B 2 matrix. The composition of large secondary phases is found to be (Mg, Al)B 7+δ , with the mole fraction of excess boron (δ) increasing from 0.99 at.% in the pure sample to 4.14 at.% in the highest alloyed sample. The Al to Mg mole fraction ratio in these large secondary phases is about half of that in the matrix. The size and density of the large secondary phases increased with increase in Al mole fraction. The secondary phases constitute less than 4% of the total sample volume and are thus not likely to affect the bulk superconductivity. Magnesium diffusion and evaporation governed the formation of secondary phases and can be explained by considering the effects of annealing temperature, annealing time, and boron powder particle size.The residual resistivity (ρ 0 ) of pure MgB 2 (x = 0) and Al-alloyed MgB 2 (x = 0.1, 0.2, 0.3), measured by the four-probe technique is comparable to the single crystals, indicating the excellent quality of these samples. The lattice parameters c and a decrease at a rate of 1.15 pm and 0.17 pm/at.% Al, respectively. The superconducting transition temperature (T c ) determined by measuring the resistive superconducting transition decreases with increasing Al alloying at a rate of 1.56 K/at.% Al.