Cu-Y₂O₃ and Cu-Y₂O₃-Zr composites were prepared via mechanical alloying and spark plasma sintering, and their microstructure and properties were systematically studied by using optical metalloscope, scanning electron microscope, transmission electron microscope, conductivity and tensile tests. It is found that the microstructure of the composites greatly affects mechanical behavior and electrical conductivity. The improvement of electrical property can be attributed to the formation of coherent Y₄Zr₃O₁₂ particles and the preferential nucleation of Cu₄Zr phase, which improves the interface between Y₂O₃ and Cu matrix, and reduces the dislocation density, respectively. In addition, the Cu-Y₂O₃-Zr composites can achieve 265.6 MPa of yield strength, 301.0 MPa of ultimate tensile strength, 23.6% of elongation, and 92.0%(IACS) of electrical conductivity.