The TiAl-Ti2AlC composites with and without impurities, Ni, Cl and P, were prepared by combustion reaction from the elemental powders and cast after arc melting. The resulting composites had about 18 vol% Ti2AlC in the lamellar matrix consisting of γ-TiAl and Ti3Al (α2). In the homogenized specimens, the α2 phase decomposed to γ-TiAl and Ti2AlC. The composite material had a high strength both at ambient and elevated (1173 K) temperatures; about 800 and 400 MPa, respectively, with an ambient temperature ductility of 0.7% at bending test. The fracture toughness test also proved that the homogenized composite has higher toughness than the as cast one. The toughness value reached to 17.8 MPa m1/2. The zigzag cracks propagated in the homogenized composite and the reinforcement Ti2AlC particles and the finely precipitated Ti2AlC particles were main obstacles to the crack propagation. The composite with impurities showed a marginal improvement in the oxidation resistance over the composites without impurities.