Diamond reinforced aluminum matrix composites have been successfully fabricated by selective laser melting (selective laser melting, SLM). The fracture and the diamond particles were observed and analyzed in the forming process. The main defects of the composite are the thermal damage of diamond and a large number of holes. The analysis shows that the thermal damage of diamond is mainly caused by the graphitization of diamond which is generated by the direct irradiation of laser. The TiC coating on the surface of diamond could not protect diamond from laser damage. The holes among diamond particles are mainly due to the poor wettability between diamond and matrix during SLM process in an extremely short period, which can not melt easily. So that, a large number of holes are formed.