Al–Sc alloys have high strength, plasticity, and corrosion resistance, making them ideal lightweight materials for the aerospace and automotive industries. However, the practical application of these alloys is constrained by the high cost of Sc. We investigate the substitution potential of lower-cost rare-earth elements X (X = La, Ce and Er) for the expensive Sc in Al–Sc alloys through first-principles calculations. Assessing substitution formation energy, substitutional segregation, and their impact on (001), (110), and (111) γ-Al/γ′-Al3Sc interfaces, results highlight Er as the most promising candidate among the three, thermodynamically replacing Sc in Al3Sc precipitates. Er atoms selectively segregate to γ-Al/γ′-Al3Sc interfaces, enhancing stability by reducing interface energies. The morphology of precipitates undergoes a transition from a truncated cuboctahedron to an {111}-faceted octahedron. Increased Er segregation further bolsters interfacial fracture strength, attributed to segregation-induced charge accumulation. Our work could offer reference for the design of rare-earth Al alloys with low-cost and high-performance.