The interface microstructure and shear strength of Sn2.5Ag0.7Cu0.1RExNi/Cu solder joints under thermal-cycle loading were investigated with scanning electron microscope (SEM), energy dispersive spectroscopy (EDS), X-ray diffraction (XRD) and physical and chemical tests. The results show that an intermetallic compound (IMC) layer of Sn2.5Ag0.7Cu0.1RExNi/Cu solder joints evolved gradually from the scalloped into larger wavy forms with increasing number of thermal cycles. The roughness and average thickness of IMC increased with thermal-cycle loading. However, at longer thermal-cycle loading, the shear strength of the joints was reduced by about 40%. The fracture pathway of solder joints was initiated in the solder seam with ductile fracture mechanism and propagated to the solder seam/IMC layer with ductile-brittle mixed-type fracture mechanism, when the number of thermal cycles increased from 100 to 500 cycles. By adding 0.05 wt.% Ni, the growth of the joint interface IMC could be controlled, and the roughness and average thickness of the interfacial IMC layer reduced. As a result, the shear strength of joints is higher than those without Ni. When compared to joint without Ni, the roughness and average thickness of 0.05 wt.% Ni solder joint interface IMC layer reached the minimum after 500 thermal cycles. The shear strength of that joint was reduced to a minimum of 36.4% of the initial state, to a value of 18.2 MPa.