A new fundamental approach to the design of high strength, high thermal conductivity dispersion-strengthened copper alloys for applications in actively cooled structures is developed. This concept is based on a consideration of the basic principles of thermodynamics, kinetics and mechanical properties. The design requirements for these materials include a uniform distribution of fine particles for creep and fatigue resistance, a high thermal conductivity, thermodynamic and chemical stability at temperatures up to 1300 K, a small difference in the coefficients of thermal expansion betwcen the particle and matrix, and low particle coarsening rates at the processing and service temperatures. The theory for creep of dispersion-strengthened metals developed by R6sler and Arzt is used to predict the optimum particle sizc for a given service temperature and to illustrate the need for a high interracial energy. Resistance to coarsening leads to a requirement for low diffusivity and solubility of particle constituent elements in the matrix. Based on the needs for a low difference in thc coefficients of thermal expansion to minimize thermal-mechanical fatigue damage and low diffusivity and solubility of the constituent elements, several candidate ceramic phases are compared using a weighted property index scheme. The results of this quantitative comparison suggest that CeO z, MgO, CaO and possibly YzO~ may be good candidates for the dispersed phase in a copper matrix.