The AA5052 aluminum alloy is widely used in automobile and aerospace manufacturing, and with the development of light-weight alloys, it is required that these materials exhibit better mechanical properties. Previous studies have demonstrated that the addition of Sc to aluminum alloys can improve both the microstructure and properties of the alloys. In this study, the effect of Sc on the Fe-rich phase and properties of the AA5052 aluminum alloy was studied by adding 0%, 0.05%, 0.2%, and 0.3% Sc. The results show that with the increase of Sc, the coarse needle-like Fe-rich phase gradually transforms into Chinese-script and then nearly spherical particles, reduce the size of Fe-rich phase, and refine the grain with increase of high angle grain boundaries (HAGBs). These microstructure changes enhance the strength of the AA5052 alloy through Sc addition. The ductility of the alloy is obviously improved because the addition of a lower amount of Sc changes the morphology of Fe-rich phase from needle-like into a Chinese-script, and it is subsequently reduced as a result of significant increase in HAGBs with increasing Sc content.