High resolution transmission electron microscopy (HRTEM) and related analytical techniques are considered as the most important tools for characterization of conventional and advanced materials and have become indispensable for nanotechnology. This paper reviews the recent applications of electron microscopic techniques used for characterizing nanomaterials. Emphasis is placed on the site-specific specimen preparation by focused ion beam (FIB) milling for subsequent detailed analysis by transmission electron microscopy. Examples of aluminium matrix nanocomposites reinforced with C60 crystals and TiO2 which were produced by different processing routes are presented. The nanocomposites exhibit a good combination of physical and mechanical properties as compared to conventional alloys for a range of automotive, aerospace and defence applications. Furthermore, the characteristics of the interfacial and nanophase structure are discussed to elucidate their role in improvement of physical and mechanical properties.