Ni coating was prepared on the surface of Al₂O₃ by chemical deposition method. Ni coated Al₂O₃ particles (Al₂O₃p@Ni) was used as particle-reinforcement for iron matrix. The Al₂O₃p@Ni/Fe composites were prepared by SPS. Results show that by optimizing electroless plating process, the surface of Al₂O₃ is uniformly covered by Ni. Ni coating presents a typical cauliflower structure with the size of 1~4 μm, which is deposited in pits and holes on the surface of Al₂O₃ and then gradually extends outwardly. The thickness of Ni layer is up to 100.55 μm, and Ni coating is closely bounded to Al₂O₃. In the process of sintering, Ni coatings not only improve the wettability between Al₂O₃ and iron matrix, but also promote the diffusion and reaction of Al₂O₃ and iron matrix at the interface. Finally, Al₂O₃/NiAl₂O₄/(Al_0.8Cr_0.2)₂O₃/NiFe₂O₄/Ni/iron matrix interface layer is formed by mechanical bonding, interdiffusion and chemical reactions, which can improve interface bonding strength greatly. The wear tests of Al₂O₃p@Ni/Fe composites and Al₂O₃p/Fe composites were carried out. Compared with Al₂O₃p/Fe composites, the wear mass loss of Al₂O₃p@Ni/Fe composites is decreased by 50%, and the friction coefficient is decreased by 12.5%. The wear resistance of Al₂O₃p@Ni/Fe composites is greatly improved.