The reduction mechanism of the composite powders mixed with $WO_3$ and CuO has been studied by using thermogravimetry (TG), X-ray diffraction, and microstructure analyses. The composite powders were made by simple Turbula mixing, spray drying, and ball-milling in a stainless steel jar with the ball to powder ratio of 32 to 1 at 80 rpm for 1 h without process controlling agents. It is observed that all the oxide composite powders are converted to W-coated Cu composite powder after reducing treatment under hydrogen atmosphere. For the formation mechanism of W-coated Cu composite powder, the sequential reduction steps are proposed as follows: CuO contained in the ball-milled composite powder is initially reduced to Cu at the temperature range from 20$0^{circ}C$ to 30$0^{circ}C$. Then, $WO_3$ powder is reduced to W $O_2$ via W $O_{2.9}$ and W $O_{2.72}$ at higher temperature region. Finally, the gaseous phase of $WO_3(OH)_2$ formed by reaction of $WO_2$ with water vapour migrates to previously reduced Cu and deposits on it as W reduced by hydrogen. The proposed mechanism has been proved through the model experiment which was performed by using Cu plate and $WO_3$ powder.der.