The reduction behavior of WO3 and CuO powder mixture has been studied by using thermo-gravimetric(TG), X-ray diffraction, and scanning electron microscopic analyses. The powder mixture was manufactured by ball-milling. It was found that W coated W-Cu composite powders were formed when reducing the powder mixture under hydrogen atmosphere. The following reduction steps are suggested as a mechanism for the formation of W coated W-Cu composite powders: with increasing temperature, Cu is initially reduced from CuO and the reduction reactions of WO3 to WO2 via WO2.9 and WO2.72 are followed. The gas phase WO2(OH)2 is formed by the reaction of the WO2 and water vapor, and then WO2(OH)2 diffuses toward Cu surface and deposits on it as W by reducing reaction with environmental hydrogen gas. The formation mechanism of W coated W-Cu composite powders involving the gas phase transportation reaction has been confirmed by the model experiment conducted by using Cu plate and WO3 powder.