The microstructure and mechanical property of gold cladding silver composite bonding wire under different true strains were characterized by metallographic microscope, double beam electron microscope, high-low temperature tensile tester and nano-indentor. The results show that the silver alloy core of gold cladding silver composite bonding wire evolves from cellular dendrite to fiber structure along the drawing direction. The gold cladding layer is uniform and continuous and the transition layer near the interface always keeps fine equiaxed or spherical grains during the deformation process. Inconsistent size change among each component is observed during deformation, and the fitted size change constant is not proportional to the change of wire diameter. Microhardness, tensile strength and elongation increase with the increase of deformation amount. During the uniaxial drawing process, the unidirectional tensile strain becomes a complex two-dimensional stress state due to the interaction between each component of the composite wire. Thus the plasticity and toughness of the material can be improved because the alternating stress inhibits the nucleation of crack.