In this paper, Al-7%Si-0.6%Mg-X%Ce (X=0, 0.1 and 0.2) casting alloys were prepared by vacuum induction furnace. Using optical microscopy (OM), X-ray diffractometer (XRD), scanning electron microscopy (SEM), energy spectrometry (EDS), differential scanning calorimetry (DSC) and transmission electron microscopy (TEM), the microstructures of the experimental alloys were studied, and the mechanism of refinement and modification of the alloy were discussed. Results show that AlCeSi2 was formed after adding cerium element in the Al alloy, besides those compounds of α-Al, silicon, eutectic of α-Al + Si and iron-rich phase. Furthermore, with the increase of cerium addition, α- Al dendrite arms decrease, the AlCeSi2 was formed, and the growth of iron-rich phase was hindered, respectively. Also, the areas of eutectic of α-Al + Si were decreased, due to the supercooling increasing of the alloys. In addition, the α-Al grains were refined, because existing of heterogeneous nucleation core supplied by AlCeSi2, and component supercooling caused by cerium adding. Moreover, the formation of AlCeSi2 consumed to some silicon elements, which leaded to size and amount reduction of eutectic silicon. The formation of high-density stacking fault can induce silicon modified, and the formed high-density stacking fault was produced by cerium as impurity element into silicon.