This work aimed to examine the structure of Cu-Y2O3 composite, analyse the fracture mechanism, and propose the model of fracture. The in-situ tensile test in SEM was used for direct observation of the process of deformation and fracture. Microscopic analysis revealed that Cu matrix grains are spherical with a mean diameter of ∼ 500 nm. EDX and selected area electron diffraction confirmed the presence of Y2O3 particles. Particles can be divided, according to the size, into two categories: smaller A (up to 20 nm) and more significant B (20-100 nm). The in-situ tensile test in SEM showed that the first cracks were created on the particle-matrix interfaces and in the triple point. Subsequent coalescence was observed, and we assumed that the cracks propagate along the grain boundaries. The fracture surface has a transcrystalline ductile character. Based on the in-situ observations and analysis, we proposed the model of fracture mechanism.