This study was intended to investigate the mechanical properties and microstructure of iron based composite reinforced by ultra high temperature ceramics fabricated by powder metallurgy technique. The fabrication parameters were optimized and composite samples with different volume fraction of TiB2 were fabricated and were subjected to different mechanical tests. The results indicated improving in mechanical properties of Fe-TiB2 composites by increasing the volume fraction of TiB2 up to 20 vol%. More TiB2 particles didn’t improve the mechanical properties of composite, instead adversely affected it due to increasing the chance of agglomeration and porosity in entire microstructure. Another finding showed the twofold characteristic of TiB2 on mechanical properties of composite via increasing the hardness and decreasing the bulk density of composite. Finite Element Analysis (FEA) have also been performed on microstructural based developed models to simulate failure of composites. Numerical simulation results could verify the experimental results.