The microstructure and mechanical properties of Al86Ni6Y6−xCo2Pdx (x = 0, 0.5 and 1) rods, with a 1 mm diameter, have been investigated. The Al86Ni6Y6Co2 alloy consists of ductile fcc-Al and hard Al3Ni intermetallic phases embedded in the matrix. Replacing Y by Pd in the Al86Ni6Y6Co2 alloy promotes precipitation of additional crystalline phases, producing composite materials with tuneable mechanical behaviour. Compared to conventional Al-based crystalline alloys, the Al86Ni6Y6Co2 rod is relatively hard (395 HV) but exhibits a brittle behaviour when compressed at room temperature. The compressive plasticity increases to 1.5% in the Al86Ni6Y5.5Co2Pd0.5 alloy but the hardness decreases in this case. The plasticity, hardness and elastic properties of these alloys depend on the amount and intrinsic properties of the different constituent phases, as well as on the resulting microstructure obtained after the casting process (i.e., the size and shape of the precipitates).