In this experiment, an intermediate alloy (Al-3Sr-8Y) that can refine and modify A356 alloy simultaneously was developed, and the synergistic effect of Sr and Y on the microstructure and mechanical properties of A356 alloy was investigated. The results show that when the content of Al-3Sr-8Y intermediate alloy reaches 0.3 wt.%, the morphology of α-Al dendrites is significantly refined and the secondary dendrite arm spacing (SDAS) was significantly reduced. Moreover, the morphology of eutectic Si transforms from acicular to small fibrous, and the average area and aspect ratio of eutectic Si decrease to 0.81 μm2, and 2.01. This change is caused by the twin plane re-entrant edge (TPRE) poisoning mechanism, where the addition of Al-3Sr-8Y can poison the intrinsic growth position of the Si phase, reduce the growth rate of the Si phase, promote isotropic growth, and achieve a highly branched morphology of the Si phase to form a fibrous structure. Due to the excellent synergistic effect of Sr and Y, the tensile strength and elongation of the alloy reached the maximum values of 303.5 MPa and 9.5% when 0.3 wt.% Al-3Sr-8Y was added after heat treatment, which is an increase of 18.2% and 86.3% compared with the untreated A356 alloy, respectively.