Thermo-mechanical treatments with stepped annealing were investigated to improve the strength and conductivity of Cu–11Fe–6Ag in situ composite. Changes in microstructure, Vickers hardness and conductivity of the heat-treated composite were studied. The results show that stepped annealing at a certain draw ratio produce better combination of strength and conductivity. After three stepped annealing at η=4.1, 5.5 and 6.9, Cu–11Fe–6Ag obtain strength/conductivity combination of 1140MPa/68% IACS at η=7.6 and 1260MPa/63.8% IACS at η=8.3, which are the best combination reported for Cu–Fe system to date. However, that of the same processed Cu–12Fe is only 962MPa/62% IACS at η=7.6. The two composites exhibit different responses to the treatment due to the role of Ag: strengthening the composite in the form of precipitations and fibers and accelerating precipitation kinetics of Fe from the matrix.