Copper (II) acetylacetonate (Cu(acac)2) vapor decomposition and subsequent copper and copper (I) oxide particle formation were studied in a vertical laminar flow reactor in the presence of hydrogen and water vapor in a nitrogen atmosphere. The presence of hydrogen does not significantly affect on the decomposition rate. The most reactive conditions for the precursor decomposition appear when water vapor is introduced into the system. A mechanism for Cu(acac)2 decomposition in the presence of water has been proposed. The reaction pathway can be divided into three steps: formation of gaseous hydrate complex; a proton transition from the coordinated water to a ligand and further liberation in the form of gaseous acetylacetone; the partial destruction (oxidation) of the resulting ligands and reduction reaction of Cu2+ to Cu0. The formation of copper particles leads to a surface catalytic reaction of the organic decomposition products. As a result of this reaction, low volatile long chain compounds containing ketone, alcohol, ester, and ether groups are formed. The crystallinity of the particles depends on the experimental conditions and changes from copper to copper (I) oxide when the precursor vapor pressure is decreased from PCu(acac)2 = 6 to 0.13 Pa at tfurn = 432 °C and the temperarture is increased to tfurn = 705 °C at PCu(acac)2 = 6 Pa. A qualitative thermodynamic explanation of the change of crystalline phases is proposed. Primary particle size distributions were measured at tfurn = 432 °C. The size of the particles is dependent on PCu(acac)2; the geometric mean diameter of Dp = 27.3 nm (with geometric standard deviation of σg = 1.34) at PCu(acac)2 = 6 Pa, Dp = 15.6 nm (σg = 1.35) at PCu(acac)2 = 1.9 Pa, Dp = 5.2 nm (σg = 1.33) from TEM images and Dp = 6.1 nm (σg = 1.35) from DMA measurements at PCu(acac)2 = 0.13 Pa, and Dp = 4.2 nm (σg = 1.19) from DMA measurements at PCu(acac)2 = 0.07 Pa.