The effect of Sr addition on the as-cast microstructure of AS31 alloy was studied. The experimental results show that the grain size decreased obviously from 1116μm to 221μm for AS31 alloy with addition of 0.05%Sr, and promote the formation of globular grains. The morphology of eutectic Mg2Si phase is changed from Chinese script to polyhedral shape or fine fibers shape. The grain refinement mechanism is attributed to the enrichment of Sr element at solidification interface front, which restricts the growth of α-Mg primary dendrite. The modification of the eutectic Mg2Si phases results from the dissociative Sr changing the preferred growth manner of them.