Nanostructured Cu-AlO composite powders were synthesized by thermochemical process. The synthesis procedures are 1) preparation of precursor powder by spray drying of solution made from water-soluble copper and aluminum nitrates, 2) air heat treatments to evaporate volatile components in the precursor powder and synthesis of nano-structured CuO + O, and 3) CuO reduction by hydrogen into pure Cu. The suggested procedures stimulated the formation of the gamma-AlO, and different alumina formation behaviors appeared with various heat treating temperatures. The mean particle size of the final Cu/AlO composite powders produced was 20 nm, and the electrical conductivity and hardness in the hot-extruded bulk were competitive with Cu/AlO composite by the conventional internal oxidation process