This work investigates the synthesis process and characterization of a novel type of aluminum-ytterbium master alloy in molten salts. The significance of the obtained results for the research conducted in the field so far is due to the previously proven effectiveness of the influence of ytterbium on the structure and properties of aluminum alloys. During experimental work, the thermodynamic analysis of the aluminothermic process of ytterbium fluoride reduction from molten salts was performed and revealed that the process might occur and develop in the presence of sodium fluoride and potassium chloride if the NaYbF 4 precursor is formed. Subsequently, the temperature intervals of thermal effects during the process of reduction of ytterbium from its fluoride in molten salts (NaF -KCl) by aluminum were determined as a result of thermal analysis. During Al -Yb master alloys synthesis experiments, the maximal value of ytterbium extraction to master alloy of 82.5% was achieved by changing the process parameters, such as temperature, reaction time, and molten salts/aluminium ratios. Besides, master alloys containing ytterbium from 1.1 to 5.1 wt.% were synthesized using the optimized technological process conditions and examined with metallographic analysis. The analysis revealed that the microstructure of the synthesized master alloys is presented by eutectic colonies of Al + Al 3 Yb composition located along the boundaries of α-Al dendritic cells. It was found that about 85.5% of the area of the studied samples with ytterbium content of 5.1 wt.% consist of aluminum dendrites with an average cell size of 25 μm. The presented in this research results are of significant importance for the development of cheap and high-quality aluminum alloys.