Cu alloys have been widely used in the manufacture of liners because of their high density, good plasticity, and excellent thermal conductivity. In order to achieve excellent jet stability and penetration performance, it is necessary to further improve the mechanical properties of Cu-based liners. Nevertheless, the simultaneous enhancement of strength and ductility of the Cu alloys remains a huge challenge due to the strength–ductility trade-off phenomenon of metals/alloys. In this study, the microstructure evolution of rare earth Nd-modified Cu alloy and its effect on mechanical properties were investigated using OM, SEM, EBSD, and TEM techniques. The results show that the ultimate tensile strength (218 MPa) and elongation (50.7%) of sample 1 without Nd are the lowest. With increasing Nd content; the tensile strength and elongation of the samples increase; and the mechanical properties of sample 4 are the best, with a tensile strength of 278.6 MPa and elongation of 65.2%. In addition, with the increase in Nd content, not only is the grain size of the Cu-Nd alloy refined, but also the strength and plasticity are improved so that the strength–ductility trade-off phenomenon is improved. The strength improvement is mainly attributed to grain refinement strengthening, dispersion strengthening, and strain hardening. The increase in ductility is mainly related to the improvement of the microstructure heterogeneity by the Nd element.