A 15 vol. Pct SiCw/Al composite was fabricated by a squeeze cast route followed by hot extrusion in the extrusion ratio of 18:1 and cold rolling to 50%. Microstructural evolution in the cold rolled composite during annealing was studied using macrohardness measurement and transmission electron microscopy (TEM). It was found that, during cold rolling the plastic flow of the matrix was restricted by the whiskers around them along the rolling direction, which resulted in different microstructure from near whiskers to far away. The cold rolled composite exhibited different microstructural development on 1 h annealing at different temperatures. Under annealing at about 100℃, recovery reaction occurred obviously and the introduction of SiC whiskers resulted in enhanced recovery reaction. Under annealing above about 200℃, recrystallization (growth of nuclei by high-angle grain boundary migration) and extended recovery took place simultaneously. When annealing temperature was increased up to 500℃, recrystallization fully took place in the cold rolled microstructure. The starting temperature of recrystallization was about 200℃. Whiskers played a role in stimulating the nucleation of recrystallization.