  We present a comprehensive study of CaCu$_3$Ru$_4$O$_{12}$ using bulk
sensitive hard and soft x-ray spectroscopy combined with local-density
approximation (LDA) + dynamical mean-field theory (DMFT) calculations.
Correlation effects on both the Cu and Ru ions can be observed. From the Cu
$2p$ core level spectra we deduce the presence of magnetic Cu$^{2+}$ ions
hybridized with a reservoir of itinerant electrons. The strong photon energy
dependence of the valence band allows us to disentangle the Ru, Cu, and O
contributions and thus to optimize the DMFT calculations. The calculated spin
and charge susceptibilities show that the transition metal oxide
CaCu$_3$Ru$_4$O$_{12}$ must be classified as a Kondo system and that the Kondo
temperature is in the range of 500-1000 K.
