Prevention of dissolution of Fe in Cu is a key parameter for production of Cu-Fe dual-matrix nanocomposites with improved properties. To this purpose, GNPs electro-less coated Ag were used for the production of Cu-20%Fe/GNPs nanocomposite with improved mechanical, physical and wear properties. GNPs were coated using electro-less deposition of Ag nanoparticles to improve the surface properties of GNPs and inhibit formation of Fe3C and Fe7C3 intermetallic phases that result from reaction between GNPs and Fe. The effect of GNPs weight fraction on the aforementioned properties was studied experimentally. The results showed that hardness of Cu-20%Fe/0.6%GNPs nanocomposite improved by 12.5% compared to Cu-20%Fe dual-matrix composite. Moreover, this nanocomposite shows 81.9% less wear rate than Cu-20%Fe dual-matrix composite with slight reduction in the density and electrical conductivity. Increasing GNPs content more than 0.6% decreases the mechanical and physical properties of the produced composites due to the agglomeration of GNPs on the grain boundaries of Cu and Fe.