In this investigation, aluminum matrix composites with different graphite contents (6%, 12% and 18% volume fraction) are prepared using hot-press and powder metallurgy method. The distribution of graphite particles in the matrix is investigated by optical microscope. Density of the composite samples are examined and it is seen that increasing the graphite content decreases the densification due to graphite content and particle size. Results reveal that thermal conductivity of Al-18%G composite sample increased to 252 W/m.K. Similarly, results show that by compositing coefficient of thermal expansion (CTE) in 50–250 °C range decreased to 19.6 ppm/K. Finally, thermal stability of Al-18%G sample is evaluated by exposing to 1, 20, 50 and 100 thermal cycles. Due to difference between CTE of matrix and graphite, cracks propagate through the reinforcement/matrix interface and results in sample failure. Calculated CTE values are highly consistent with theoretical results of geometrical, Maxwell and Maxwell-Eiken models.