Considering the environmental problems created by mineral based lubricants, exploring the possibility of the use of vegetable base oils as automobile lubricants has been a growing worldwide trend. In the present study, analysis of coconut oil as a lubricant has been carried out in the perspective of its tribological behaviour using a pin-on-disc tribometer. Copper oxide nanoparticles are added to the oil on weight-percentage basis, the variation of its friction-reduction and antiwear properties are analysed. At an optimum concentration of nanoparticles, the coefficient of friction and the specific wear rate are found to be the lowest. Viscosity of oil is also seen to increase by an increase of concentration of nanoparticles. Flash-point remains constant while the fire-point increases as the nanoparticle concentration is increased. From dispersion analysis it is seen that the nano oil is not suitable enough for long stationary applications. Surface structure of the worn surfaces obtained by Atomic Force Microscopy (AFM) and Scanning Electron Microscopy (SEM) shows that the optimum concentration of nanoparticles in this lubricant causes the roughness of the worn pin surface to reduce to a low value after sliding. Wear scar obtained in the presence of nano oil is smoother compared to that with bare coconut oil. When the level of nanoparticles increases above the optimum level, friction coefficient and wear rate are seen to increase.