The deagglomeration process and its effects on the microstructure have been investigated for fine MgO, SiC powders and SiC particle added MgO mixed powders which were ball-milled under both polar- and non-polar solvent without deflocculants. During the drying, exothermic reactions are observed at 300–450 °C in MgO and SiC powders ball-milled in alcohol. On the other hand, no chemical reaction could be observed for the powders ball-milled using acetone, and nn-hexane. The observed exothermic reactions, then, are believed to be due to the oxide and/or oxide layer-alcohol reaction product formed during milling. This mechano-chemical reaction directly affects to deagglomerate during the drying process after wet-milling. Among the alcohol media, the well-dispersibility and deagglomeration of SiC powders as well as MgO powders seem to be reached by n-butyl alcohol, considering the balance between the steric effects and the dielectric constant of alcohol. These dispersion characteristics also effect on the microstructure of SiC particle dispersed MgO based composites.