The present study involved development of copper-based metal matrix composite, reinforced with waste EN 31 steel chips and TiB2 ceramic particles. Waste EN 31 steel chips and TiB2 ceramic particles were ball-milled for 100 h to obtain a single entity. The composite material was produced with a stir-casting technique, followed by a squeeze pressure process. The addition of Cu + 10 wt% of waste steel chips + 5 wt% of TiB2 improved the tensile strength of the copper matrix by about 68.35%. Furthermore, the addition of Cu + 5 wt% of waste steel chips + 10 wt% of TiB2 and Cu + 12.5 wt% of waste steel chips + 2.5 wt% of TiB2 increased the hardness and toughness of the copper matrix by about 133.33% and 28.57%, respectively. The addition of Cu + 10 wt% waste steel chips + 5 wt% of TiB2 ensured minimal corrosion weight loss in the metal matrix composite as a result of low porosity and a strong bond between the molecules. Further, representative volume element (size: 225 × 225 × 225 nm)-based finite element analysis was done to explain the micro-mechanical deformation, interfacial strength of matrix-particle interaction and damage behavior of Cu + 10 wt% of waste steel chips + 5 wt% of TiB2 metal matrix composite. A user material sub-routine model was also written and implemented with the help of FORTRAN subroutines to simulate the macro-mechanical tension test process of Cu + 10 wt% waste steel chips + 5 wt%TiB2 metal matrix composite. The results revealed a good agreement between the micro-mechanical and macro-mechanical finite element analysis models on the one hand and the experimental results on the other. Further, the representative volume element (with matrix and particles) showed about 59% and 66.5% higher tensile strength compared to the matrix–particle interface and the matrix (without particles), respectively. The percentage difference between the micro-mechanical finite element analysis and the experiments as well as the macro-mechanical finite element analysis and the experiments was found to be 5.58% and 9.64%, respectively. The finite element analysis results established that the waste steel chip powder particles exhibited greater stress than the TiB2 powder particles.