Sc is a common additive element in aluminum alloys, while the functional mechanism of Sc in aluminum alloys is not completely understood. The traditional 7N01 aluminum alloy and novel Sc modified 7N01 aluminum alloy were prepared by electrical resistance furnace melting. After homogenization treatment, two kinds of 7N01 alloys were hot extruded into plates, then exposed to two-stage artificial aging. Microstructures were comparatively analyzed by electron backscatter diffraction (EBSD) and transmission electron microscopy (TEM). The mechanical properties of aged hot-extruded plates were measured by electronic universal testing machine. Meanwhile, the functional mechanism to strengthen the alloy was analyzed. The results show that a small number of nanometer-sized Al3(Zr, Ti) phases are precipitated in traditional 7N01 aluminum alloy, while a large amount of nanometer-sized Al3(Sc, Zr, Ti) phases exist in 7N01 aluminum alloy with 0.12wt% Sc after homogenization treatment at 470 ℃ for 24 h. The high-density Al3(Sc, Zr, Ti) phases which are coherent with matrix have a significant pinning effect on the migration of grain boundaries. It obviously improves the critical subgrain size for recrystallization nucleating. Also, the dynamic recrystallization in the hot extruding process is effectively inhibited. As a result, 7N01 aluminum alloy with 0.12wt% Sc is almost constitutive of full fiber-like structure. At the same time, the tensile strength and yield strength of 7N01 aluminum alloy with 0.12wt% Sc are 10.7% and 13.3% higher than those of traditional 7N01 aluminum alloy. The calculated results indicate that fine-grain strengthening and dispersion strengthening caused by Sc addition are 7 and 57 MPa, respectively. The strengthening effect is mainly derived from dispersion strengthening of Al3(Sc, Zr, Ti) phases.