Titanium alloys have been known as useful materials for their superior mechanical properties, low density and high specific strength. However, the application of conventional titanium alloys on engine parts of airplane is limited by their poor wear resistance, low fatigue strength and low hardness. Particles reinforced titanium matrix composites have attracted extensive investigation in material science and engineering. Mechanical properties can be improved by reinforcing the loaded outer layer of Ti with ceramic particles. TiB and TiB₂ are considered as the excellent ceramic reinforced particles for their compatible physical and thermodynamic properties, high hardness and Young's modulus of elasticity. However, TiB₂ has high brittleness. The intermetallic compound NiTi, well-known for its shape memory effect and pseudo-elasticity, is one of the rarely few intermetallic compounds having excellent combination of high strength, ductility and toughness as well as excellent wear resistance and fabrication processing properties. An in situ TiB/TiB₂ structured ceramic materials as the reinforcing phase and NiTi intermetallic phase as the matrix would be expected to have an outstanding combination of high hardness and toughness. To investigate the microstructure and properties of the cladded layers, two types of composites were prepared by laser cladding powders containing TiB₂ and Ni+TiB₂ as a preset level on the surface of titanium alloy. The composite coatings were analyzed by XRD, SEM, EPMA, micro hardness tester and brinell hardness. The results showed that TiB₂ particulate and TiB short fiber reinforced titanium matrix composite coating were obtained, which had poor quality of coating shape when Ni was not added. The coating was mainly composed of TiB₂, TiB, Ti and NiTi phase when Ni was added and surface coating quality was improved and the bcc structure of NiTi alloy was filled with TiB₂ particulate and TiB short fiber surrounding. The coating was coarse with particle size of TiB₂ at 3~5 μm when Ni was not added, while it contained fine particles of TiB₂ with particle size of 0.5~3 μm and b-Ti base appeared when Ni was added. The micro-hardness of the coating was reduced when Ni was added, but the fracture toughness of the coating increased. The mechanism of toughening was discussed based on fracture behaviors. Fracture toughness of titanium matrix composite coatings were improved mainly through particle debonding and short fiber breakage by the offset resulting in crack deflection.