The effects of Er addition to the Al‐Fe‐Si alloy on phase composition, microstructure, electrical conductivity, and mechanical properties are studied. Formation of the Al 3 Fe, Al 6 Fe, Al 3 Er, ErSi and Al 10 Fe 2 Er intermetallic phases in the Al‐Fe‐Si‐Er alloy is proved by optical microscope (OM), scanning electron microscope (SEM), and transmission electron microscope (TEM). The results show that the spherical Al 3 Er precipitates with a radius of less than 6.5 nm ± 0.5 nm form a coherent phase boundary with α‐Al. The recovery temperature range and the recrystallization temperature of Al‐Fe‐Si alloy with Er addition after 80% cold deformation is recorded by differential scanning calorimetry (DSC). After annealing at 260 °C for 1 h, the electrical conductivity of the rolled Al‐0.4Fe‐0.05Si‐0.2Er alloy increases from 60.1 to 62.2 IACS%, and the hardness decreases from 50.5 to 36.6 HV. The average tensile properties of the Al‐0.4Fe‐0.05Si‐0.2Er alloy are YS = 131 ± 3 Mpa and ultimate tensile strength (UTS) = 142 ± 3 MPa with 13 ± 1% elongation after annealing at 260 °C for 1 h. The average radius of Al 3 Er precipitates in Al‐0.4Fe‐0.05Si‐0.2Er is 7.8 ± 0.2 nm, and its strengthening mechanism is Orowan mechanism.