The structural changes and the strengthening of a Cu-3%Ag alloy subjected to large strain drawing and subsequent annealing were studied. The cold working was carried out at an ambient temperature up to total strain above 8. The hardness increased from 600 MPa in the initial state to about 1800 MPa with increasing the total strain. The annealing treatment at 400°C resulted in increase in the hardness to about 2000 MPa for the samples cold worked to total strains above 2. On the other hand, the hardness change of the samples annealed at 450°C dependent significantly on the preceding cold strain. Namely, annealing softening took place in the samples processed to strains below 5, while the samples processed to larger strains were characterized by remarkable hardening after annealing. The value of annealing hardening increased with increasing the previous cold strain, leading the hardness to 2500 MPa in the sample strained to 7.4. The cold worked and annealed samples were characterized by the development of lamella-type microstructure consisting of highly elongated copper grains with uniform distribution of nano-scaled silver particles having a size of about 2 nm.