The present paper reports contamination effects on precipitation hardening found in alloys prepared from Cu and Al2O3 powders by mechanical alloying and extrusion. Different sizes and volume percents of added Al2O3 particles were considered. The main conclusion of this research about alloys prepared from Cu and Al2O3 powders by mechanical alloying in a steel attritor and consolidation by extrusion, are as follows. Fine particles, containing Fe, Al and Cr were observed in dislocations and grain boundaries. These particles play an important role in material strengthening, through dislocation and grain-boundary pinning mechanisms. It is proposed that such fine particles be produced by dissolution of simple oxides and by subsequent heterogeneous precipitation of complex ones. The initial simple oxides might be small fragments of alumina particles, copper oxides from the surface of copper powders and iron oxides from the wearing of the mill steel parts.