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The effects of magnesium (Mg) addition on mechanical properties and microstructure of aluminum matrix composite (AMC) have been investigated in this work. Aluminum ADC12/graphite was combined by Mg produced by stir casting. The effect of addition graphite into matrix has been studied with variation 2, 4, and 6 wt- % for each composites. The addition of Mg as wetting agent was introduced with 0.4, 0.6, and 0.8 wt-% to promote wettability between ADC12 and graphite. All composites were characterized both microstructures analysis and mechanical properties include tensile strength and hardness. The higher reinforcement content, the higher porosity formed, due to the tendency of de-wetting as well as particles agglomeration. One of the main intermetallic phases present evenly in aluminum matrix is Mg2Si which was confirmed by X-Ray Diffraction (XRD). The added Magnesium in the material that will form Mg2Si primary phases who have a high hardness value of these composites.