analytical elastic-plastic stress analysis is carried out on an aluminum metal-matrix composite beam reinforced by unidirectional steel fibers supported at the ends acted upon with a force at the mid point. The expansion of the plastic region and the residual stress component of sigma(x) are determined for theta = 0, 30, 45, 60 and 90degrees orientation angles. Plastic yielding occurs for 0 and 90degrees orientation angles on the lower and upper surfaces of the beam at the same distances from the mid point. But, it starts first at the upper surface for 30, 45 and 60degrees orientation angles. The residual stress components are obtained after releasing the external force. The residual stress component of sigma(x) is maximum at the lower and upper surfaces. It becomes greater on the boundary of elastic and plastic regions at distant cross sections from the origin. However, the intensity of the residual stress component tau(xy) is maximum on or around the x axis of the beam. The beam can be strengthened by using the residual stresses.