Fine-grained copper (Cu) and copper-zirconia (Cu–ZrO2) nanocomposites were produced by high-energy ball milling up to 20 h. Scan Electron Microscope (SEM), Transmission Electron Microscope (TEM), X-Ray Diffraction (XRD), microhardness, wear rate and coefficient of friction measurements were performed to investigate the correlation between micro/nano-structure changes of powder and consolidated samples and the properties of the produced nanocomposites. Cu and Cu–15%ZrO2 nanocomposites with 49.3 and 24.4 nm crystal size, respectively, were produced after 20 h milling achieving 1.76- and 3-times larger hardness than the as received Cu. The wear rate of milled Cu was slightly decreased than the as received Cu, however, it was highly reduced for Cu–15%ZrO2 nanocomposites reaching 10-times lower than the as received Cu. SEM, TEM and XRD analysis revealed that four main strengthening mechanisms lead to the great improvement of Cu–ZrO2 nanocomposites properties. The major strength improvement occurred due to Orowan and dislocation strengthening mechanisms activated by the well dispersion of ZrO2 nanoparticles in Cu matrix and their impedance to dislocation movement, respectively. Besides these two main strengthening mechanisms, work hardening and grain refinement acted as minor strengthening mechanisms for Cu–ZrO2 nanocomposites while they are the main strengthening mechanisms of Cu samples.