Copper matrix composites reinforced with graphite flakes (GFs/Cu) were fabricated by powder hot pressing method and the alloying chromium (Cr) element in powdered form was directly added into the Cu matrix powder to enhance the interfacial bonding between GFs and Cu matrix. Effects of addition of Cr on thermal conductivity (TC), coefficient of thermal expansion (CTE), and bending strength of GFs/Cu composites in XY (basal plane of GF) and Z directions were investigated in this study. The results showed that in XY direction, the TC of 50 vol% GFs/Cu composites increased from 560 to 628 W m−1 K−1 after adding 2.0 wt% Cr, and the bending strength nearly doubled from 53.8 (GF/Cu) to 93 MPa. The CTE in Z direction could be obviously reduced with Cr addition, which dropped gradually from 9.4 to 3.2 ppm K−1 at 150 °C with the increase in content of Cr from 0 to 5.0 wt%. This improvement in TC, bending strength, and CTE is attributed to the formation of carbide transition layer at the interface between Cu and graphite. The detailed influence of carbide layer on the properties of the composites was thoroughly studied by corresponding evolution of interfacial microstructure with increasing Cr content.