In the paper, forward extrusion-equal channel angular extrusion (FE-ECAE), which is new strain-induced melt activation (SIMA) method, is introduced in making semi-solid billet of 7A04 alloy. The principle of the method is that by using FE-ECAE as strain induced step and semi-solid isothermal treatment as melt activation step. The results show that semi-solid billet with highly spheroidal and homogeneous refined grains can be prepared by FE-ECAE method. The equivalent strain in FE-ECAE before reheating has a great influence on its microstructural evolution. Grain size decreases and its shape also approaches to sphericity with increasing equivalent strain. The main mechanism of the initial semi-solid grains coarsening was coalescence. With the prolongation of isothermal holding time, the grains grew up and spheroidized, in which the mean diameter of grain and liquid volume fraction increased. In the meantime, the higher the reheating temperature, the faster the grain grew and spheroidized. Subsequently, the main mechanism of grains coarsening was Ostwald ripening. The suitable reheating temperature of 7A04 alloy was 610°C.