Disks of a eutectic Cu–Ag alloy were processed by high-pressure torsion (HPT) up to 20 revolutions to reveal the microstructural evolution and mechanical properties. Both the Cu and Ag phases were thinned continuously with increasing numbers of revolutions. After 20 revolutions, the alternating Cu and Ag phases were significantly refined and became fibrous with dimensions as thin as 5 nm. The strain hardening behavior of the Cu–Ag alloy was characterized after different numbers of HPT revolutions, and a saturation microhardness was attained. It is shown that the tensile fracture mode changed from necking to fully brittle shearing with increasing numbers of revolutions, and some shear offsets with sizes of ∼5–20 μm were observed on the fracture surfaces. Based on the abnormal saturation microhardness value of the eutectic alloy, the strengthening mechanisms of various Cu–Ag alloys are discussed.