Closed recycling process for low-grade scrap of Al-based composite materials was developed. Flux treatment with water-soluble halide is a key technique in this process. In the present work, flux treatment conditions were discussed from the viewpoints of separation and recovery of base material, reinforcement and flux. Optimum separation condition was obtained for the NaCl–KCl–KF flux treatment. The recovered aluminum alloy can be recycled for various usages. The recovered SiC particles cannot be reused as reinforcement because of the coexistence of contamination, therefore it is necessary to eliminate these contaminates or to find the other uses. The recovered flux is reusable with supplemental addition of fluoride.