Amongst the Metal Matrix Composites (MMCs), Al-Si-Mg alloy/ SiCp MMCs are very attractive for their mechanical properties. But, the formation of brittle interfacial reaction product, Al4C3 has been one of the major concerns when these materials are processed by liquid phase methods. The extent of Al4C3 formation depends on various processing parameters such as temperature, wt% of SiCp, particle size of SiCp and chemical composition of the matrix alloy especially Silicon (Si) content. According to recent studies, various difficulties in finding the process parameters to get desirable properties of Al alloy/ SiCp MMCs as desired by the industries. Thus, in the present study thermodynamic & structural estimates in Al alloy/ SiCp MMCs under various process conditions, composition, microstructures were performed. The relatively low cost liquid stir casting technique is used in the production of Al alloy/ SiCp MMCs with varying Silicon content (0-7%) in the alloy matrix using process temperature 710oC. Al4C3 layer formation on SiCp surface, Critical Si content for Al4C3 separation from SiCp surface, eutectic Si formation, existence of near-dislocation segregation regions after formation of Al4C3 on SiCp surface and the equilibrium amount of Si to suppress Al4C3 formation were investigated using Transmission electron microscopy (TEM). The separation of Al4C3 from SiCp surface was observed after 3% Si. The equilibrium Si content of 7% was found to suppress the formation of Al4C3 with thermodynamic model and its significance has been assessed. © (2012) Trans Tech Publications, Switzerland.