CuO nanocrystals of different surface areas were prepared. All samples were characterized by X-ray diffraction, transition electron microscope, thermogravimetry, Brunauer-Emmett-Teller technique, Fourier transform infrared spectroscopy, and Raman spectroscopy. CuO nanocrystals showed a stable monoclinic structure. With increasing surface areas, the surface hydration became significant, which is followed by shifts in infrared frequencies and Raman phonon modes. CuO nanocrystals were explored as an additive to catalytic decomposition of ammonium perchlorate (AP). AP decomposition underwent a two-stage process. Addition of CuO nanocrystals led to a downshift of high-temperature stage towards lower temperatures.