The effect of trace Nb nanoparticles on the thermal properties, wettability, microstructure, and mechanical properties of Sn–0.7Cu solder alloy was investigated. The results showed that the melting temperature of Sn–0.7Cu composite solder alloy is between 229 °C and 231 °C, and the effect of Nb nanoparticles on the melting temperature is not obvious. The wettability of the solder alloy is remarkably improved by adding Nb nanoparticles. Coarse β-Sn phase and β-Sn/Cu6Sn5 eutectic in the Sn–0.7Cu composite solder alloys are refined by adding appropriate Nb nanoparticles, and then the ultimate tensile strength (37.3 MPa) and the elongation (2.47 mm) of Sn–0.7Cu alloy are increased to the maximum 45.4 MPa and 4.59 mm for Nb-containing alloy. The fracture mechanism of Sn–0.7Cu–xNb composite solder alloys is plastic fracture.