The thermal decomposition of copper(II) acetate monohydrate (CuAc2·H2O) under 500 °C in air was studied by TG/DTG, DTA, in situ FTIR and XRD experiments. The experimental results showed that the thermal decomposition of CuAc2·H2O under 500 °C in air included three main steps. CuAc2·H2O was dehydrated under 168 °C; CuAc2 decomposed to initial solid products and volatile products at 168–302 °C; the initial solid products Cu and Cu2O were oxidized to CuO in air at 302–500 °C. The copper acetate peroxides were found to form between 100 and 150 °C, and the dehydration of these peroxides resulted in the presence of CuAc2·H2O above 168 °C. The initial solid products were found to be the admixture of Cu, Cu2O, and CuO, not simply the single Cu2O as reported before. Detailed reactions involved in these three steps were proposed to describe the complete mechanism and course of the thermal decomposition of CuAc2·H2O in air.