In this paper, fatigue tests were conducted on the new class of magnesium matrix composite reinforced with amorphous alloy particle. The high cycle fatigue behavior and the ability to resist crack nucleation and propagation of Ni60Nb40/Mg composites have been studied. Moreover, effects of microstructure and particle distribution on fatigue properties and crack growth mechanism are investigated. The difference of the microstructure is the cause for different crack initiation and propagation and this condition influenced fatigue life. Composites with more uniform particle distribution possess a superior fatigue resistance in fatigue limit. In situ crack growth observation revealed fatigue crack initiation occurred preferentially at particle-matrix interfaces. In addition, it was observed that the crack growth in particulate reinforced composites is highly localized phenomenon, influenced primarily by the distribution and microstructure of particles near the vicinity of the crack tip. The crack propagation through the matrix and region of well-dispersed particles is predicted by a crack growth law while crack propagation through the region of particle clusters is considerably different and unpredictable.