The structure and morphology of a precipitation product in an Al-10Mg-0.5Ag (mass%) alloy aged isothermally at 240 C have been characterised using transmission electron microscopy and microbeam electron diffraction. A metastable T phase (Mg 32 (Al, Ag) 49 , b.c.c., a ¼ 1:41 nm) which is identified by the electron microdiffraction patterns, has been found in the Al-10Mg-0.5Ag (mass%) alloy after solution treatment, water quenched and then aged for 2 h at 240 C. The orientation relationship between the T phase and matrix -Al phase was of the form ð010Þ T k ð11 1 1Þ and ½001 T k ½1 1 10 . Qualitative microanalysis suggested that the metastable crystalline T phase was a ternary compound that contained all three elements Al, Mg and Ag. The morphology of the metastable T phase is the h110i rod-like in shape and those precipitate particles are homogeneously nucleated, and finely and uniformly dispersed in the Al matrix. The icosahedral quasicrystalline phase was observed in the early stages of ageing (0.5 h at 240 C), and it was to be replaced by the metastable crystalline T phase Mg 32 (Al, Ag) 49 after the alloy is aged for 2 h at 240 C. The T phase formed as faceted rods parallel to h110i directions of the -Al matrix appeared to be the primary strengthening constitute exhibiting maximum hardness in the Al-10Mg-0.5Ag (mass%) alloy aged at 240 C.