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Aluminum matrix composites (AMCs) are largely used in defense, maritime, and space applications for their excellent properties. LM5 is used where very high resistance to corrosion from seawater or marine atmospheres is required, for equipment used for the manufacture of foodstuffs, cooking utensils, and chemical plants. Zirconia is preferred over other reinforcements as it shows comparatively great refractory properties, high scratch resistance, and thermal shock resistance. Utilizing the stir casting technique, an attempt was made to produce AMCs of LM5 aluminum alloy strengthened with ZrO₂. The weight percentage of ZrO₂ was changed to 0%, 3%, 6%, and 9%. The specimens were prepared and tested as per ASTM standards to find the density, micro and macro hardness, impact, tensile, and compressive strength. The micrographs and SEM images confirm the uniform distribution of ZrO₂ particles in the aluminum matrix. LM5/9%ZrO₂ AMC has the highest density value of 2.83 g/cm³ and LM5/3%ZrO₂ has the least porosity of 2.55%. LM5/9% ZrO₂ has the highest hardness values of 78 VHN and 72 HRE. LM5/6% ZrO₂ AMC has the highest tensile strength of 220 MPa, compressive strength of 296 MPa, and toughness of 12 J. LM5/6% ZrO₂ AMCs may be used for many structural applications.