The primary objective of this study is to explore the precipitation behavior of Al–Cu–Li alloy powder processed through a two-step approach: friction consolidation (FC) followed by high-pressure torsion (HPT). Microstructure analysis by scanning electron microscope shows a refined microstructure after FC, with a further reduction in grain size following HPT. X-ray diffraction analysis confirmed the formation of T₁, T₂, and δ precipitates after FC, which persisted even after HPT. Small-angle X-ray scattering shows a reduction in the volume fraction of larger precipitate particles after HPT, while the smaller grain volume fraction increased. Additionally, the volume fraction of precipitates decreased as a function of strain. To understand the contributions of various mechanisms to an enhanced hardness observed after HPT, a physical model was employed. This study explores how HPT influences dislocation behavior, precipitation, and grain size, highlighting its role in tailoring the microstructure and properties of the friction consolidated Al–Cu–Li alloy.