Plastic deformation was observed by TEM around the intragranular SiC particles in the matrix for nanocomposite system. The dislocations are generated at selected planes and there is a tendency for the dislocations to form a subgrain boundary structure with low-angel grain boundaries and networks. In this study, dislocation generated in the matrix during cooling down from sintering temperatures by the highly localized thermal stresses within and/or around SiC particles caused from the thermal expansion mismatch between matrix and SiC particle was observed. In monolithic and microcomposite system. These phenomena is closely related to the plastic relaxation of the elastic stress and strain energy associated with both thermal misfitting inclusions and creep behaviors. The plastic relaxation behavior was explained by combination of yield stress and internal stress.