In the present work, the microstructures and modification performance of Al-10Sr (in wt.%) alloy prepared by molten salts electrolysis and direct mixing process have been investigated by scanning electron microscopy (SEM), transmission electron microscopy (TEM) and modification tests. It has been found that the microstructure of deeply etched Al-10Sr alloy prepared by electrolysis is markedly different from that prepared by direct mixing method. The primary Al4Sr phase is dendritic in the electrolysis-prepared Al-10Sr alloy and slablike in the mixing-prepared alloy. Different from the primary Al4Sr, the morphology of eutectic Al4Sr in the electrolysis-prepared Al-10Sr alloy is similar to that in the mixing-prepared alloy. TEM images only show the local morphology of Al4Sr due to the very large size of primary phase and no obvious difference in morphology can be observed between the alloy prepared by electrolysis and that by mixing. The modification performance of the electrolysis-prepared Al-10Sr alloy is better than that of the mixing-prepared alloy. Compared to the mixing-prepared alloy, the amount of Sr addition can be reduced and the incubation time shortened, keeping the same degree of modification effect when the electrolysis-prepared alloy is used. The correlative mechanisms have also been discussed.