An Al-4.3 wt % Cu-2.0 wt % Mg alloy reinforced with 20 vol% reinforcing fibres was examined after a T7 heat treatment. The expected precipitate phase was equilibrium S’ (Al2CuMg), which was confirmed to form in the monolithic alloy. However when this Al-Cu-Mg alloy was squeeze-cast into a fibre preform and given an identical T7 heat treatment a number of other phases also nucleated; these included theta’ (Al2Cu), beta’ (Mg2Si) and the cubic sigma phase (Al5Cu6Mg2). These additional phases were determined to nucleate and grow rapidly during the water-quench following solution treatment. The existence of excess Si (approximately 0.5 wt %) in the matrix was determined to be responsible for nucleation of these additional phases. This extra Si entered the composite matrix during squeeze-casting through breakdown of an SiO2 layer which existed at the fibre interfaces. During quenching Si clusters rapidly form and provide nucleation sites for the sigma and theta’ phases. The Si clusters apparently created a compressive strain in the matrix which attracted a high concentration of small Cu atoms to their interface. The sigma phase nucleated in this high-Cu region since, on a localized scale, sigma became the equilibrium phase. This type of nucleation process may also explain the enhanced precipitate nucleation which occasionally takes place in other alloy systems when trace amounts of certain elements are added.