A Kovar alloy composite wire inlaid with copper core was developed through hot isostatic pressing sintering and subsequent multi-pass drawing. The interface between the Kovar alloy and copper was revealed, and the physical properties of the composite wire were investigated. The results show that the Kovar alloy and copper diffuse mutually during the forming process, producing a stable metallurgical bond. When the diameter of the wire is 2.8 mm, a diffusion layer of about 16.5 μm was found at the interface. The concentration of the diffused element had a gradient distribution from the interface to both sides. Combining the excellent properties of Kovar alloy and copper, the composite wire has comprehensive physical properties. The electrical and thermal conductivities are 9.38 × 106 S·m−1 and 72.2 W·m−1·K−1, respectively. The composite wire has a low coefficient of thermal expansion, and the average coefficient of thermal expansion is lower than 6.36 × 10−6 ℃−1 in the temperature range of 25–450°C.