Electro-less deposition synthesized Al2O3 nanoparticles coated Ag with different weight percent (0, 2.5, 5, 7.5 and 10) were mixed with pure Cu powder to manufacture Cu–Al2O3 nanocomposite through powder metallurgy route. The effect of Al2O3 coated Ag nanoparticles weight fraction on the Microstructure, mechanical and wear behaviors of Cu–Al2O3 nanocomposite were investigated. The results showed that coating of Al2O3 nanoparticles with Ag helped for achieving excellent dispersion of Al2O3 nanoparticles at high weight percent. The EDX mapping images demonstrated that the Al2O3 reinforcement particles were homogeneously distributed into the Cu matrix for Cu–10%Al2O3 nanocomposite. Microstructural analysis showed that the addition of Al2O3 coated Ag nanoparticles improved density of the produced composites. The compressive strength was improved by increasing Al2O3 content up to 10% reaching 33% improvement in the strength compared to pure Cu. Moreover, the hardness of the produced nanocomposite increased from 63.9 to 165 HV as Al2O3 content increases from 0 to 10 wt.%. Additionally, the wear analysis showed that the wear resistance of the nanocomposites improved with the increment of nanoparticle content. This improvement was due to the presence of Al2O3 coated Ag nanoparticles, which increased the dislocation density and reduced the crystallite size of Cu structure. The increased dislocation density reduced the dislocation movement, which improved the hardness and compressive strength, and thus improve the wear rates.