Metal matrix composites (MMCs) offer enhanced mechanical, thermal, and electrical properties compared to traditional materials, making them highly desirable for various applications. The powder metallurgy process is a widely used technique for manufacturing MMCs, but it is accompanied by several challenges that need to be overcome to achieve optimal composite properties. This review focuses on discussing the key challenges encountered in the powder metallurgy process of MMCs and the strategies employed to overcome them. The challenges include achieving uniform powder distribution, overcoming poor interfacial bonding, addressing particle agglomeration, controlling porosity, and ensuring proper reinforcement dispersion. Various techniques such as powder blending, surface modification, optimized sintering parameters, and advanced consolidation methods are explored as potential solutions to these challenges. Additionally, the influence of powder characteristics, reinforcement types, and processing parameters on the final composite properties are discussed. By understanding and effectively addressing these challenges, researchers and manufacturers can optimize the powder metallurgy process of MMCs, leading to the production of high-quality composites with tailored properties for specific applications.