The present study aims at development of nano-AlN reinforced aluminum metal matrix composite through stir casting method. For this commercially pure aluminum (CP-Al) and CP-Al + 2 wt% AlN nano-composite were casted at 760 °C by stir casting method. Both the alloy and the composite were subsequently characterized using optical microscopy and scanning electron microscopy. They were further tested for mechanical properties and dry sliding pin-on-disk wear studies were carried out at three different loads at room temperature at 200 rpm up to a sliding distance of 2 Km. The results indicate good particle dispersion into the matrix and massive grain refinement in the nano-composite. Accordingly, there is an improvement in UTS and 0.2% YS values by more than 100% by keeping ductility unaffected in the composite compared to the base alloy. Grain refinement and strengthening effect of nano-particles are the reasons for this improvement. Moreover, the wear study reflects considerable improvement in wear resistance in the composite at all loads. Suppression of adhesion (at all loads) and plowing abrasion (at 60 N load) are attributed to this improvement in wear resistance in the composite.