In this study, the use of coating layers is investigated to reduce thermal stresses in the metal matrix composites which have a mismatch in coefficients of thermal expansions in fiber and matrix components. The thermoelastic solutions are obtained based on a three-cylinder model. It is shown that the effectiveness of the layer can be defined by the product of its coefficient of thermal expansion and thickness. Consequently, a compensating layer with a sufficiently high coefficient of thermal expansion can reduce the thermal stresses in the metal matrix. The study is based on a concentric three cylinder model isolating individual steel fibers surrounded with a coating layer and an aluminum matrix layer. Only monotonic cooling is studied.