In order to reveal the refinement mechanism of Er on Ti 2 AlC particles and lamellae colony, as well as the strengthening mechanism of TiAl composites, Ti–46Al–8Nb-2.6 C-xEr as cast alloys were prepared. The microstructure and phase composition were observed by SEM, TEM and X-ray diffraction. Results show that the relative contents of γ phase increase and α phase reduce, the size of lamellae colony decreases from 42.7 to 29.6 μm, lamellae spacing decreases from 0.73 to 0.64 μm and the content of Ti 2 AlC particles with aspect ratio (1–5) increases from 14 to 47% as Er increases from 0.04 to 0.1 at.%. The orientation relationship with [0 1‾ 0] E r 2 O 3//[1‾ 2 1‾ 0] T i 2 A l C,(102) E r 2 O 3//(0002) T i 2 A l C,(001) E r 2 O 3///(20 2‾ 5) T i 2 A l C was observed by TEM. Result shows that Er 2 O 3 particle development on the (0002) of Ti 2 AlC limits atomic spreading and layered superposition perpendicular to the plane, resulting in Ti 2 AlC refinement. The compressive strength and the strain increase from 1853 to 2223 MPa and 25.1–25.8% as Er increases from 0.04 to 0.1 at.%. Results of Vickers hardness test displays that Vickers hardness increases from 425.8 to 512.6 HV as Er increases from 0.04 to 0.08 at.%. The significant refinement of Ti 2 AlC particles by Er 2 O 3 particles, precipitation strengthening of ErAl 3 phase, fine grain strengthening of lamellae colony and solid solution strengthening of Er contribute significantly to the better compressive strength.