The addition of Y or Gd to Al thin films markedly decreases the grain size of the Al matrix and largely suppresses growth of hillocks at high temperatures (350-450 degrees C) associated with a large number of segregated metallic compounds, mostly at grain boundaries. The resistivities of the films after annealing at those high temperatures are less than 50 n Omega m. These tendencies also hold true for other Al rare-earth alloy systems. The breakdown voltage of anodically oxidized films of Al-Y and Al-Gd alloys is higher than that of pure Al thin films.