Effect　of　minim　amount　rare　earth　Er　on　micro-structure　and　performance　has　been　systematically　investigated　for　a　Sn3.8Ag0.7Cu　lead-free　solder　alloy.　It　is　found　that　the　addition　of　minim　amount　Er　in　the　Sn3.8Ag0.7Cu　solder　leads　to　slight　decrease　in　melting　temperature,　increase　in　spreading　area　and　shear　strength.　Through　observation　of　microstructure,　the　area　fraction　of　eutectics　is　increased　and　the　size　of　prime　intermetallic　compounds　(IMC)　is　decreased　due　to　the　effect　adding　Er.　The　thickness　of　IMC　layer　between　solder　and　substrate　Cu　is　restrained　in　the　aging　process,　and　the　restraint　is　especially　evident　after　aging　of　400　h.　This　will　be　helpful　for　the　reliability　of　soldered　joint.　The　results　indicates　that　the　SnAgCuEr　alloy　with　minim　amount　rare　earth　is　lead-free　solder　alloy　with　excellent　performance.