In this study, the effect of Sn and Mg on microstructure and mechanical properties of Cu-Fe-P alloy were investigated by using scanning electron microscope, transmission electron microscope, tensile strength, electrical conductivity, thermal softening, size and distribution of the precipitation phases in order to satisfy characteristic for lead frame material. It was observed that Cu-0.14wt%Fe-0.03wt%P-0.05wt%Si-0.1wt%Zn with Sn and Mg indicates increasing tensile strength compare with PMC90 since Sn restrained the growth of the Fe-P precipitation phase on the matrix. However, the electrical conductivity was decreased by adding addition of Sn and Mg because Sn was dispersed on the matrix and restrained the growth of the Fe-P precipitation. The size of 100 nm $Mg_3P_2$ precipitation phase was observed having lattice parameter $a:12.01{AA}$ such that [111] zone axis. According to the results of the study, the tensile strength and the electrical conductivity satisfied the requirements of lead frame; so, there is the possibility of application as a substitution material for lead frame of Cu alloy.