The preparation of Ti, Al, Ni composite powders by coating Ni on Ti and Al elemental powders is discussed. The pretreatment given to the elemental powders also plays an important role in increasing the coating thickness. The increase in the amount of Ni can be indirectly measured by the magnetic moment test. This is the only method to incorporate the P in the alloy by powder metallurgy process. The composite powders can be used to prepare γ-TiAl alloys and can subsequently be used as a matrix material to prepare γ-TiAl alloy composites to improve their oxidation resistance, toughness and wear resistance. Addition of Ni to this alloy is expected to improve the oxidation resistance by replacing the Ti in the sublattice site instead of Al.