Magnesium (Mg) offers a tremendous weight saving potential as an advanced lightweight material in the automotive and aerospace industries. However, the application of Mg is limited by its low corrosion resistance and low mechanical properties especially at elevated temperature. To overcome the limitations of Mg, carbon nanotubes (CNTs) are considered to be ideal for the fabrication of Mg matrix composites due to their high aspect ratio and superior mechanical properties. However, the design of CNTs-reinforced Mg matrix composites requires a homogeneous dispersion of CNTs and a good interfacial bonding between the CNTs and the Mg matrix for an effective strengthening of the composites by CNTs. Consequently, the coating of CNTs is considered to be an effective strategy to improve the wettability of CNTs by Mg and promote the dispersion of CNTs in the metal matrix. In this work, a new technique was developed for the coating of CNTs with either SiOC or SiC using a polymethylhydrosiloxane (PMHS) precursor to enhance the properties of AZ91 composites. Initially, the transformation of PMHS to SiOC and SiC was established via a simple curing technique followed by pyrolysis in Ar at 900 and 1500 °C, respectively. Then, a preliminary application of PMHS as a coating precursor for CNTs found that SiOC can be coated on the individual CNTs as a discontinuous or continuous coating layer or precipitated densely on the CNTs agglomerates. The effect of coating concentration on the morphology and dispersibility of the CNTs were further studied through a more extensive production of SiOC and SiC coated CNTs. Intermediate coating concentration (i.e. 45-55 wt%) was found to be suitable for the wetting of CNTs by the AZ91. The addition of either SiOC coated CNTs or SiC coated CNTs had successfully led to a notable grain refinement by up to 66 % in grain size reduction, increase in hardness by up to 17 %, and increase in yield strength by up to 15 % in the AZ91 composites in comparison to the pure AZ91.