The effect of Nd content in Al films on hillock formation was investigated for applications of interconnections for thin film transistor liquid crystal displays. It was found that the hillock density of Al-Nd alloy films was strongly dependent on the Nd content, and the hillocks were completely suppressed in Al-2.0-6.0 at. % Nd alloy films. X-ray diffractometry, x-ray absorption fine-structure spectroscopy, and transmission electron microscopy indicated that the microstructures of Al-Nd alloy films strongly depend on the Nd content, and Al-2.0-6.0 at. % Nd alloy films form a stable solid solution with a polycrystalline alpha-Al-like structure. The results obtained from microstructural analysis were largely in agreement with hillock formation behavior. In this study, it was found that the excellent hillock resistance of Al-2.0-6.0 at. % Nd alloy films originates from solid-solution hardening by the strongly distorted alpha-Al-like structure.