The effects of rare earth yttrium on the microstructures and mechanical properties of Ti-17Al-27Nb alloy were studied.The as-cast microstructures of Ti-17Al-27Nb alloy with 0.85%Y(mole fraction) addition were refined and the tensile elongation also increased. Yttrium in the alloy exists as Y2Al according to the EPMA, XRD analysis and electronegativity differences. Y2Al distributes mainly on the grain boundary. Yttrium is found to improve the tensile strength of Ti-17Al-27Nb alloy due to the grain boundary strengthening. Furthermore, Y2Al distributing in the grain boundary leads to grain refinement by pinning grain growth.This fracture mode has been changed from intergranular fracture for Ti-17Al-27Nb alloy to a mixture of intergranular fracture and transgranular fracture for Ti-17Al-27Nb-0.85Y alloy. The dimples were observed distinctly. Therefore, this yttrium containing alloy shows an excellent plasticity.