TiB2-reinforced iron matrix composite (Fe-TiB2) powder was in-situ fabricated from titanium hydride (TiH2) and iron boride (FeB) powders by the mechanical activation and a subsequent reaction. Phase formation of the composite powder was identified by X-ray diffraction (XRD). The morphology and phase composition were observed and measured by field emission-scanning electron microscopy (FE-SEM) and energy-dispersive X-ray spectroscopy (EDS), respectively. The results showed that TiB2 particles formed in nanoscale were uniformly distributed in Fe matrix. Fe2B phase existed due to an incomplete reaction of Ti and FeB. Effect of milling process and synthesis temperature on the formation of composite were discussed.