The microstructural evolution of precipitation in two model alloys, Fe–NiAl and Fe–NiAl–Cu, was investigated during aging at 500°C for different times using atom probe tomography (APT). The APT results reveal that the addition of Cu effectively increases the number density of NiAl precipitates. This is attributed to Cu promoting the nucleation of NiAl particles by increasing the chemical driving force and decreasing the interfacial energy. The NiAl precipitates of the Fe–NiAl–Cu alloy grow and coarsen at a slower rate than that of the Fe–NiAl alloy, mainly due to the slower diffusion rate of the Cu atoms. The mechanical properties of the two alloys were characterized by Vickers hardness and tension tests. It was found that the addition of Cu results in the formation of core–shell precipitates with a Cu-rich core and a NiAl shell, leading to a dramatic improvement of peak hardness and strength. The effect of Cu on precipitation strengthening is discussed in terms of chemical strength and coherency strength.