Molecular dynamics (MD) simulations are used to reveal the mechanisms of defect substructure evolution and atomic mixing in nanocrystalline Cu/Ni composites under severe shear deformation and subsequent thermal annealing. A continuous shear scheme of MD simulation utilizing an on-the-fly periodic boundary adjustment approach enables it to reach any large shear strain. The comprehensive evaluation on the evolution of dislocation structures at various strain states indicates partial dislocation-mediated plastic deformation and triple junction slide via partial dislocation nucleation and emission from triple junctions and grain boundaries. The analysis of atomic structures in unique mixing regions suggests that triple junction sliding can result in a long-range region of atomic mixing facilitated by net dislocation flux, which is the key mechanism of atomic mixing in nanocrystalline Cu/Ni composite under severe shear, while dislocation emissions at interfaces result in short-range mixing. It is also found that thermal annealing causes the evolution of non-equilibrium defect substructures which assists atomic mixing.