Abstract: The phenolic resin(PF) modified by nano-copper, used in friction materials, was successfully prepared by in situ producing method invented newly. The prepared resin was characterized by XRD and TEM. The results show that the nano-copper particles are well dispersed in PF in diameter of 10~40 nm, and in spherical geometry. The results of TGA, impacting tests and friction and wear experiments indicate that the heat-resistance of the modified PF can be greatly raised. Compared with those of the pure PF, the initial decomposing and the half decomposing temperature rise by 31℃and 46℃, respectively; The toughness and tribological properties of the modified PF could be distinctly improved. Compared with those of the pure PF, the impact strength increases by 44%, the heat-fade rate and wear rate reduce by 50% and 2/3, respectively. The interfacial model of the phenolic resin / nano-copper composite was proposed. The mechanisms were discussed, that the properties of phenolic resin and friction materials are improved by nano-copper.