Cu–ZrO2 nanocomposites were produced by the thermochemical process followed by powder metallurgy technique. Microstructure development during fabrication process was investigated by X-ray diffraction, field emission scanning electron microscope and transmission electron microscope. The results show an improved distribution of zirconium dioxide (ZrO2) nanoparticles (45 nm) in the copper matrix, which resulted in the improvement of mechanical properties of Cu–ZrO2 composites. The nanocomposite with 9 wt-% ZrO2 possesses the highest hardness (136.5 HV) and the superior compressive strength (413.5 MPa), resulting in an overall increase by 52 and 25%, respectively. The wear rate of the nanocomposites increased with increasing applied loads or sliding velocity.