Dispersion strengthened copper alloys have been produced following an innovative powder metallurgy route. Copper and yttrium acetate powders have been mechanically alloyed and posteriorly thermal treated at 923 K for 3 h and 15 h under a hydrogen atmosphere in order to transform the yttrium acetate into Y2O3. Subsequently, the powders were consolidated by hot isostatic pressing. It has been concluded that the duration of the thermal treatment of the powder is a determining factor in the degree of densification of the alloy. The study of the microstructure by Scanning Electron Microscopy and Electron Backscatter Diffraction has revealed the presence of micrometer and submicrometer grains and nanometric Y-O enriched Cu particles embedded in the copper matrix, the mean grain size being smaller for the sample produced from the powder thermal treated for 15 h. Transmission Electron Microscopy investigations concluded that the nanoparticles exhibit a spherical shape with a size up to 25 nm and correspond to monoclinic Y2O3. Annealing twins have been also observed, especially in the material produced from thermal treated powder for longer. The mechanical properties have been inferred from Vickers microhardness measurements and compression tests. Below 473 K the yield strengths of the produced materials are greater than that of pure copper and above 473 K are close to them. From the study of the thermal properties of the densest material it has been found that its thermal conductivity remains nearly constant in the temperature range 300-773 K, and its value is around 85% the thermal conductivity of CuCrZr, the reference material for ITER.