The interfacial reaction between eutectic Sn-3.5wt.%Ag solder and Ni substrate resulted in the formation of Ni3Sn4 intermetallic compound (IMC) layer. After formation of the Ni3Sn4 IMC, its grain coarsened and faceted continuously in a prolonged reflow reaction. The thickness of the IMC layer increased with reflow time. On the other hand, the brittleness of the joints increased with increasing reflow time, and the fracture occurred at the interface. The deterioration of the shear strength was found to be predominantly caused by the formation of the thick Ni3Sn4 IMC layer.