Effects of powder characteristics on the internal oxidation of Cu-Al prealloyed powders were discussed. The results show that the internal oxidation of Al was occurred during sintering not in ball milling when the content of Al in Cu-Al prealloyed powders was 0.8wt.%, the mechanism of Al internal oxidation was different with the milling time, when the milling time was short, the internal oxidation of Al during sintering were mainly the unsolved Al and absolute Cu-Al solid solution resulted in coarse Al2O3 and fine Al2O3 particles respectively. When the mixed powders were milling for time long enough, the internal oxidation of Al during sintering was all the metastable Cu-Al prealloyed. A good quality Al2O3-Cu composite was prepared. The Al2O3 particles with an average size 2-5 mm in diameter and about 5-10 mm in particle spacing have been observed uniformly dispersed in the composite prepared by prealloyed powders after milling 96 h.