This study utilized recycled aluminum derived from used pistons reinforced with copper (Cu) and silica sand (SiO₂) to produce an aluminum matrix composite (AMC). Fabrication was carried out using the vertical centrifugal casting method, resulting in a radial microstructural gradient characteristic of functionally graded materials (FGMs). The cast products were subsequently subjected to T6 heat treatment, consisting of solution treatment at 505 °C for 5 h, quenching in water, followed by artificial aging at varied temperatures of 140 °C, 170 °C, and 200 °C for 7 h. Characterization involved microstructural observation, Brinell hardness testing, and impact strength evaluation. Microstructural analysis revealed that aging at 170 °C generated fine, uniformly distributed Al₂Cu precipitates, yielding the highest hardness of 138.96 BHN in the outer region. In contrast, aging at 200 °C led to precipitate coarsening and marked spheroidization of β-Si, resulting in reduced hardness but the highest impact toughness, reaching 4.71 J in the inner region. These findings demonstrate a clear trade-off between hardness and toughness, highlighting that peak-aged conditions (170 °C) maximize strength, whereas over-aged conditions (200 °C) enhance fracture resistance. Overall, the combination of recycling, particle reinforcement, and optimized heat treatment provides a viable pathway for producing high-performance aluminum composites for engineering applications.