Copper nanoparticles have been synthesized in a transferred arc plasma by controlling the various processing parameters. The structure, size distribution, phase composition of the nanoparticles were characterized by field emission scanning electron microscopy (FE-SEM), transmission electron microscopy (TEM), and X-ray diffraction (XRD) analysis. Copper nanoparticles dispersed in lubricant oils by bead mill process showed a good stability over a week. Lubricants containing copper nanoparticles revealed an enhanced friction properties and thermal conductivity