Cupric oxide is a unique magnetic ferroelectric material with a transition temperature significantly higher than the boiling point of liquid nitrogen. However, the mechanism of high-T$_c$ multiferroicity in CuO remains puzzling. In this paper, we clarify the mechanism of high-T$_c$ multiferroicity in CuO, using combined first-principles calculations and an effective Hamiltonian model. We find that CuO contains two magnetic sublattices, with strong intrasublattice interactions and weakly frustrated intersublattice interactions, which may represent one of the main reasons for the high ordering temperature of the compound. The weak spin frustration leads to incommensurate spin excitations that dramatically enhance the entropy of the mutliferroic phase and eventually stabilize that phase in CuO.