The effects of 0.1 wt.% Sc and 0.1 wt.% Zr addition in AA5182 on microstructure and mechanical properties were investigated. Results show that Al3(ScxZr1−x) dispersoids formed in AA5182. Observation of ingots microstructures showed that the grain size of 5182-Sc-Zr alloy was 56% lower than that of based AA5182. Isothermal annealing between 230 °C and 500 °C for 2 h was performed to study the recrystallization, tensile properties and dispersoid coarsening. The recrystallization was inhibited by the dispersoids, and the alloy microstructure remained deformed after annealing. Al3(ScxZr1−x) in AA5182 was stable when annealing below 400 °C, while parts of dispersoids coarsened significantly when heating at 500 °C. The addition of Sc and Zr allowed YS of 5182 alloy to achieve 247.8 MPa, which is 100 MPa higher than the corresponding AA5182. The contributions of Orowan strengthening and grain boundary strengthening were obtained by calculation.