Bulk CuAlO2 with the delafossite structure was processed using two different methods. In one case, stoichiometric CuAlO2 powder was processed using the solution technique, and consolidation was carried out by pressureless sintering in air. In the second case, high purity starting powders of alumina and copper (I) oxide were consolidated by spark plasma sintering. The sintered body was then subjected to a high temperature anneal in air. Reduction of the bulk CuAlO2 samples resulted in a novel composite microstructure with copper forming a continuous intergranular phase. The prior CuAlO2 grains decomposed into an intimate two-phase mixture of metallic copper and theta-alumina. The scale of the composite structures ranged from nanometers to microns. Previous work on the delafossite family has focused primarily on the electronic properties of thin films. The present study suggests that the reduction of this class of mixed oxides gives rise to metal-ceramic structures with unique interfacial and morphological properties.