A design concept of shape memory TiNi fiber reinforced/Al metal matrix composite (SM-MMC) was proposed. Mechanical tensile properties such as stiffness and yield strength, were improved by the strengthening mechanisms: back stress in the Al matrix induced by stiffness of TiNi fibers and the compressive stress in the matrix caused by shape memory shrinkage of TiNi fibers. Damping capacity of the composite was also increased. These results suggest that this composite with prestrain can be applicable and is suitable for machinery, especially engine components where the material becomes stronger at higher temperatures owing to the shape memory effect.