In this paper, Ni coated Yb2O3 composite powder was obtained by electroless plating. The W-Ni/Yb2O3 composite powder dispersed with different contents of Ni coated Yb2O3 composite powder was first fabricated by the mechanical alloying (MA) process, the powder was then pressed and sintered at 1600 ?C for 3 hours. Surface morphology of Ni coated Yb2O3 composite powder and the W-Ni/Yb2O3 composite material were observed by FE-SEM. Relative density, microhardness and thermal conductivity of W-Ni/Yb2O3 composite material were tested. The results show that the relative density and microhardness of W-Ni/Yb2O3 composite material enhance with the increase of Ni-Yb2O3 contents, and the addition of Ni coated Yb2O3 composite powder promotes the sintering densification of W-Ni/Yb2O3 composite material. At the same time, the addition of Ni coated Yb2O3 composite powder makes the grain size of tungsten based material refined, but reduces its thermal conductivity.