The microstructural evolution and mechanical properties of the 2196 Al-Li alloy prepared by the vacuum gas atomization, hot-isostatic-pressing (HIP) and hot-extrusion were investigated. The results show that prior particle boundaries (PPBs) exist in the microstructure of the HIPed alloy, and hot-extrusion effectively breaks PPBs to restrict the element micro-segregations. The as-extruded alloy exhibits fine grains, and bears higher solution treatment temperature due to the absence of low-melting-point micro-segregations. In the ageing process, the alloy hardness continues to rise, and reaches the peak value at 48 h. The precipitation sequence of the alloy is determined to be: supersaturated solid solution (SSS) → GP zone + fine T1 + δ′ → T1 + θ′ + δ′, where T1 phase dominates the whole ageing process. The diameter of the T1 platelets increases gradually with the increase of ageing time, meanwhile the T1 number density slightly drops in the over-aged alloy. The 3% pre-stretching promotes the nucleation of T1 phase, and the peak-ageing time is shortened to 28 h. Besides, no over-ageing phenomenon is observed in the pre-stretched samples. The Mg-Cu and non-Cu clusters formed on the dislocations accelerate the precipitation of T1 phase and prevent the nucleation of θ′ phase. The yield strength (YS) and ultimate tensile strength (UTS) of the T8 sample are 490 MPa and 515 MPa, respectively, which is notably higher than the T6 sample. The tensile strength of the present alloy is relatively higher than that of the Al-Li alloys with a comparable Li content.