The aluminum matrix composite reinforced by short NiTi shape memory alloy fibers, composite, was fabricated using pressure-assisted sintering process in ambient air. Surface preparation and thermal pretreatment of NiTi fibers essential for solid state bonding of intermetallic compound were carried out. Strong interface bonding between NiTi fiber and Al6061 matrix was obtained. The strengthening mechanism of shape memory effect associated with short fiber reinforcement was theoretically examined by extending Taya’s previous model. The stress–strain behavior of the short fiber-reinforced composite was investigated at room and elevated temperature both experimentally and analytically. In order to activate the shape memory effect, the composite was prestrained at a temperature between martensite start temperature and austenite start temperature , then yield stresses as a function of the prestrain were tested and predicted at a temperature above the austenite finish temperature . It was found that: (1) the yield stress of the composite increased with increasing the amount of prestrain; (2) the prestrain value should not exceed 0.01, to make use of strengthening of the composite without loss of the ductility of the matrix; and (3) failure of the composite was caused by the strength mismatch between the NiTi fiber and aluminum matrix.