Thermal analysis technique has been used to study the effect of Sn addition on solidification characteristics and microstructure of AZ91 magnesium alloy. Solidification parameters have been extracted from cooling curves, first and second derivative curves. Different ranges of Sn between 0.1 to 1.0 wt%. have been added to the alloy. The results illustrated that the alloy containing 0.5 wt.% Sn displayed the best solidification behavior such as high nucleation temperature (T-N,T-alpha), low recalescence undercooling (Delta T-R), low dendrite coherency temperature and more solid fraction at dendrite coherency point. Microstructure of the alloys has been studied through optical microscopy (OM) and scanning electron microscopy (SEM). The phases were characterized by use of X-ray diffraction (XRD). Microstructural analysis showed that by adding Sn up to 0.5 wt.% into AZ91 alloy, refinement of alpha-Mg primary dendrites and beta-Mg17Al12 took place due to the formation of new Mg2Sn intermetallic compound.