An experimental study was carried out on cold worked Cu-12.7 wt.%Au alloy and pure copper, in order to compare the properties change during thermo-mechanical treatment. Hardness, microhardness, and electrical conductivity were studied as a function of annealing temperature and annealing time with the purpose of investigating the intensity of anneal hardening effect in cold worked Cu-12.7 wt.%Au alloy. Isochronal (up to 350 °C) and isothermal (at 250 °C for 100 h) annealing of cold worked alloy caused a two-stage increase in all of the measured properties. The mechanism responsible for this increase was analyzed using DTA, XRD, and TEM studies. The four stages observed in DTA heating curve were discussed in connection with the occurring processes. The reduction in the lattice parameter of cold worked Cu-12.7 wt.%Au alloy during annealing at 260 °C caused by the solute clustering, was observed. TEM studies did not show any presence of precipitates, other than disk-shaped areas with a higher degree of ordering. The achievement of high mechanical properties and high electrical conductivity in cold worked Cu-12.7 wt.%Au alloy after low temperature annealing was ascribed to the comparative effects of short-range ordering and solute segregation to lattice defects.