Nickel and Ni-Al composites with varying Al nanoparticle content were produced by pulsed electrodeposition using an organic additive-free sulfamate bath. The as-deposited Ni-Al composites exhibited increased compressive residual stresses with increasing Al nanoparticles. Detailed microstructural investigation revealed that Al codeposition led to significant refinement of the columnar morphology and grain structure of Ni matrix along with a texture change from strong <001> to <011> fiber texture parallel to the growth direction. The as-deposited Ni with bimodal grain structure displayed good tensile strength and ductility. The microhardness and tensile strength of the Ni deposits were increased initially with Al content and then decreased at higher particle content. Particle induced grain refinement and texture changes could be related to change in the growth of upcoming Ni nuclei on to the surface of well-dispersed Al nanoparticles. Significant grain refinement and lesser internal stresses along with good particle distribution and relatively harder <011> fiber texture at lower particles concentration collectively contributed to the observed higher strengths in Ni-Al composites as compared to Ni deposits. There was substantial change in fracture morphology from spherical dimples to flat regions with increasing Al content due to agglomeration of nanoparticles at higher particle loading.