To obtain light emitting diode (LED)-packaged substrate with high luminous efficiency and high thermal conductivity, the direct aluminum (Al) plating technology is used to prepare aluminum/aluminum oxide (Al2O3) composite ceramic substrate whose surface is also polished by chemical-mechanical method. The optical and thermal performance of the LED light source packaged by this composite substrate are simulated by using the optical simulation software Tracepro and the thermal simulation software ANSYS. This LED light source is also compared with the traditional alumina ceramic substrate package LED light source. Finally, the prepared aluminum/alumina ceramic substrate is packaged into an on-board chip-mounted (COB) type LED light source for testing. Both results of simulation and experimental tests show that the aluminum/alumina ceramic substrate prepared by direct aluminum process has faster heat transfer rate, better thermal conductivity and it is more suitable for high power LED light source packaging. LED packaged by Al/Al2O3 ceramic substrate has bigger luminous flux and higher luminous efficiency, compared with the light source packaged by traditional Al2O3 ceramic substrate.