The effect of trace vanadium addition on the microstructure of AZ91D magnesium alloy was investigated. Vanadium was introduced by adding AlV55 master alloy. The microstructure variations before and after vanadium addition and the existence form of vanadium in the alloy were analyzed by OM, SEM, EDS and XRD. The results show that the discontinuously reticulated β-Mg17Al12 phase in magnesium alloy become gradually discrete due to vanadium addition. Vanadium added in AZ91D alloy presents in the form of Al3V phase dissolving or dispersing in the β-Mg17Al12 and α-Mg phase. The mechanism of the microstructure refinement is that Al3V phase, which has a higher melting point, has formed prior to the other phases, gathering on the solid-liquid interface and inhibiting the growth of the grain during the solidification of AZ91D alloy. The increase of the grain boundary area reduces the melt volume of eutectic reaction, resulting in the refinement of β-Mg17Al12 phase. Due to the grain refinement and strengthening of Al3V phase, the brinell hardness of AZ91D alloy increases with the V content increasing