This study was undertaken to investigate the influence of the initial powder particle size on the microstructure development in a Cu-3wt% Ag alloy obtained by vacuum plasma spraying of a mixture of copper and silver powders. Various mixtures of powder particles were used where the copper powder particle size was kept as –80/+40 μm, while the silver powder particle size fraction was varied. Vacuum plasma spraying (VPS) in inert gas atmosphere was used to elaborate thick coatings (2 mm) with limited oxygen contamination. Significant variations in microstructure were obtained depending on the Ag powder size fraction that was used. These differences in behavior are discussed taking into account differences in the solid state precipitation mechanisms in the alloy.