Magnesium alloys are being used more and more in lightweight structural applications, but their high thermal expansion and low thermal stability make them hard to use widely. This study examines the electrical and thermal characteristics of AZ31 magnesium alloy matrix composites augmented with MAX-phase particles (Ti?AlC?, V?AlC, and Cr?AlC) produced through Friction Stir Processing (FSP). The findings indicate that the integration of MAX-phase improves dimensional stability, albeit at the expense of transport properties. The electrical conductivity dropped from 21.8 MS/m for monolithic AZ31 to between 19.42 and 20.12 MS/m for the composites. This was because electrons scattered at the interfaces between the matrix and the reinforcement and because of defects caused by FSP. Thermal conductivity showed a small drop, going from 139.29 to 146.22 W/m·K, because of phonon scattering (Kapitza resistance). On the other hand, the coefficient of thermal expansion (CTE) dropped by 23-25%, from 23.2 × 10??/°C for AZ31 to 17.4-17.8 × 10??/°C for the composites. V?AlC had the most balanced profile of the reinforcements, keeping the highest thermal conductivity, while Cr?AlC had better dimensional stability. These results show that MAX-phase reinforced Mg-MMCs could be useful for thermal management tasks that need very precise dimensional control.