The thermite reaction between Al and CuO is well known and highly exothermic. For a conventional thermite mixture comprising mixed metal and oxide powders, this reaction is rate limited by the slow heterogeneous mass transfer at the metal and oxide interface. The relatively low reaction rate and a difficult ignition have restricted practical applications for this reaction. For newly developed, nano-composed thermites, the interface area can be substantially increased resulting in a much higher reaction rate and a new range of possible applications. Recently, magnetron sputtering was used to create Al-CuO nanofoils for applications in joining. Nanocomposite Al-CuO compositions for pyrotechnics were also prepared using mixture or a self-assembling array of respective nanopowders. Such techniques realize the bottom-up approach, when the nanostructures or nanoparticles are built from individual atoms or molecules. Respective materials are generally expensive and difficult to handle. An alternative, top-down approach is discussed in this project. Nanocomposite Al-CuO materials are produced using a technique referred to as arrested reactive milling. Regular metal and oxide powders are blended and ball milled at room temperature resulting in a fully dense and reactive nanocomposite powder. The milling is stopped (or arrested) before a self-sustaining exothermic reaction is triggered. The powder particles are the 10-100 μm size range. Each particle has an aluminum matrix with copper oxide inclusions in the 20-200 nm size range, depending on milling parameters. The produced Al-CuO nanocomposite powders have been considered for applications in propellants, explosives, pyrotechnics, as well as for joining small parts. In accordance to the application requirements, the powder composition and morphology can be modified to optimize performance. Aluminum-rich compositions are of particular interest for novel energetic components. Synthesis methodology, material properties as a function of composition and morphology, and performance tests will be discussed in this paper.