In this article, we report the effect of cerium (Ce) addition on wettability, microstructure, and mechanical properties of Sn-3.9Ag-0.7Cu (SAC) solders. It was found that the wettability of Ce-containing solder on Cu substrate is comparable to that of SAC solder for compositions up to 0.5 wt% Ce. The microstructure of lap-shear joints containing 0.5 wt% Ce rare-earth elements showed a finer microstructure and a thinner Cu6Sn5 intermetallic layer at the Cu/solder interface. Using differential scanning calorimetry (DSC), it was found that the magnitude of undercooling was significantly reduced with the addition of Ce. It has been reported that SAC–0.5Ce alloy exhibited a much higher elongations compared with SAC alloy, however, the mechanism for the enhanced ductility is still not clear. Especially, the effect of Cu6Sn5 intermetallic layer thickness on ductility need to be further investigated. The results in this study showed that the presence of CeSn3 intermetallic particles, and not the thin Cu6Sn5 intermetallic layer, was responsible for the improved ductility demonstrated by Ce-containing solders. This finding revealed a new approach of enhancing the ductility, as well as the shock performance of Pb-free solder with additional alloying elements for the future solder alloy design.