The reduction behavior of $Al_{2}O_3/CuO$ powder mixtures, prepared from $Al_{2}O_3/CuO$ or $Al_{2}O_3/Cu-nitrate$, was investigated by using thermogravimetry and hygrometry. The powder characteristics were examined by BET, XRD and TEM. Also, the influence of powder characteristics on the microstructure and properties of hot-pressed composites was analyzed. The formation mechanism of nano-sized Cu dispersions was explained based on the powder characteristics and reduction kinetics of oxide powders. In addition, the dependence of the microstructure and mechanical properties of hot-pressed composites on powder characteristics is discussed in terms of the initial size and distribution of Cu particles. The practical implication of these results is that an optimum processing condition for the design of homogeneous microstructure and required properties can be established.