An ultrafine-grained (UFG) aluminum nano-composite was fabricated using two severe plastic deformation steps: cryomilling of powders (and subsequent consolidation of blended powders by forging) followed by high-pressure torsion (HPT). The forged bulk composite featured a trimodal structure comprised of UFG, coarse grain (CG) regions, and ceramic particles. The additional HPT processing introduced finer grain sizes and altered the morphology and spatial distribution of the ductile CG regions. As a result, both strength and ductility increased substantially compared to those of the Al nano-composite prior to HPT. The increases were attributed to the more optimal shape and spacing of the CG regions which promoted uniform elongation and yielding during tensile loading. Microstructural changes were characterized at each processing step to establish the evolution of microstructure and to elucidate structure-property relationships. The toughening effect of the CG regions was documented via fracture analysis, providing a potential strategy for designing microstructures with enhanced strength and toughness.