The thermo-stability of microstructure during isothermal annealing at 900 °C and 1000 °C in a cold-worked Cu-Al2O3 composite with 0.1 wt.% Al content and its effect on resistance to softening were investigated in this paper. The results reveal that the microstructure following cold deformation consists of a Cu matrix with a refined grain size and high-density dislocations, accompanied by dispersed Al2O3 nanoparticles exhibiting an extremely low volume fraction. During isothermal annealing at 900 °C, the Al2O3 nanoparticles can strongly restrict the migration of the dislocations and suppress the recrystallization of the fine-grained Cu matrix by the Zener pinning effect. Furthermore, the presence of pinned dislocations facilitates the formation of sub-grain boundaries comprising high-density dislocations. Consequently, the Cu-Al2O3 composite with 0.1 wt.% Al content exhibits remarkable thermo-stability in its microstructure due to the incorporation of Al2O3 nanoparticles, resulting in a significantly elevated softening temperature of up to 1000 °C and thereby demonstrating excellent resistance against softening. However, the observed phenomenon of softening after isothermal annealing at 1000 °C for 5 hours can be attributed to extensive recrystallization growth that promotes twin boundary formation, primarily caused by the weakening Zener pinning effect resulting from Oswald ripening of Al2O3 and rod-like Al2O3 formation.