Sn3.8Ag0.7Cu alloys containing Ag3Sn intermetallic compound （IMC） with different morphologies, sizes and distributions were prepared by controlling cooling rate during solidification and equal channel angle pressing process （ECAP）. The relation between mechanical property of the alloys and IMC phase was investigated. The tensile stress-strain curves of the alloys with different microstructures were compared and the deformed microstructures were observed by SEM and TEM. While the large needle-like Ag3Sn was found to provide fiber-strengthening effect to the alloy, its brittle fracture promoted void nucleation, resulting in a deterioration of tensile elongation. The fine particles of Ag3Sn produced by ECAP enhanced dispersion strengthening by blocking the dislocation motion. The particles on the boundaries of fine equiaxed Sn grains inhibited the boundary sliding, leading to improvement of the tensile strength.