Silicon nitride (Si 3N 4) particle-reinforced aluminum–copper (Al-Cu) alloy matrix composites have been prepared in our previous works and experimental result shows that they can be used as a new kind of water-lubricated materials. However, the wettability between Si 3N 4 ceramics and Al-Cu alloys is poor and the manufacturing process is usually carried out at a high temperature of 1100 °C. To overcome this shortcoming, a layer of nickel was deposited on the surface of Si 3N 4 particles, forming a core-shell structure. Thus, the interface bonding property between Si 3N 4 and Al-Cu alloy can be improved and the lower sintering temperature can be applied. Si 3N 4/Al-Cu alloy composites with different proportions of Ni-coated Si 3N 4 were fabricated by powder matrix metallurgy technology at 800 °C, and the water lubrication properties of the composite were investigated. The experimental results show that with the increase in the particle content (10 wt%–40 wt%), the microhardness of the composites increased first and then decreased, while the porosity increased continuously. A low friction coefficient (0.001–0.005) can be achieved for the composites with the lower particle content (10 wt%–20 wt%). The major wear mechanism changes from the mechanically dominated wear during the running-in process to the tribochemical wear at the low frictional stage.