The density, cell size and structure of closed-cell aluminum foam were measured by optical microscopy and image analysis. The properties and the mechanism of compressive deformation that occur in closed-cell aluminum foam were measured and discussed. The results show that the cell size of foam with density of 0.37 mg/m3 is distributed in the range of 0.5 - 4.0 mm. The cell size of foam with density of 0.33 mg/m3 is distributed in the range of 0.5 - 5.0 mm. The cell wall thickness of both types is 0.1 - 0.3 mm. The closed-cell aluminum foam almost belongs to isotropic one, with a variation of ±15% in elastic modulus and yield strength in longitudinal and transverse direction. Under compressive loading, foam materials show inhomogeneous macroscopic deformation. The site of the onset of local plastic deformation depends on the cell structure. The shape of cell is more important than size in determining the yielding susceptibility of the cells. At early stage of deformation,the deformation is localized in narrow bands having width of one cells diameter, and outside the bands the cell still remains the original shape. The cells within bands experience large permanent deformation. The band normals are usually within 20° of the loading axis.