The reduction behavior of Al2O3/CuO powder mixtures, prepared from Al2O3/CuO or Al2O3/Cu-nitrate, was investigated by using thermogravimetry and hygrometry. Also, the influence of powder characteristics on the microstructure and properties of hot-pressed composites is analyzed. It was found that the hydrogen reduction process of nano-sized oxide particles and properties of sintered composites strongly depends on their distribution and size in composite powder. The formation mechanisms of nano-sized Cu dispersions are discussed based on the powder characteristics and reduction kinetics. 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.