Aluminum-based $Al/Al_2O_3$ composites were fabricated by a powder-in sheath rolling method. A stainless steel tube with outer diameter of 12 mm and wall thickness of 1 mm was used as a sheath. A mixture of aluminum powder and $Al_2O_3$ particles of which volume content was varied from 5 to 20%, was filled in the tube by tap filling and then rolled by 75% reduction in thickness at ambient temperature. The rolled specimen was then sintered at 56$0^{circ}C$ for 0.5 h. The mixture of Al powders and $Al_2O_3$ particles was successfully consolidated by the sheath rolling. The $Al/Al_2O_3$ composite fabricated by the sheath rolling showed a recrystallized structure, while unreinforced Al powder compact fabricated by the same procedure showed a deformed structure. The unreinforced Al powder compact was characterized by a deformation (rolling) texture of which main component is {112}<111>, while the $Al/Al_2O_3$ composite showed a mixed texture oi deformation and recrystallization. The sintering resulted in recrystallization in Al powder compact and grain growth in the composite.