This paper presents a novel method for preparing heterogeneously structured AlMgScZrAg alloys with excellent properties by microalloying. The addition of Ag modified the precipitation behavior of the alloy, resulting in the combination of multi-scale precipitates and a heterogeneous lamella structure (HLS). Compared with the alloy without Ag, the AlMgScZrAg alloy exhibited a 29.5% increase in yield strength (from 186 MPa to 241 MPa) without sacrificing plasticity. The synergistic strengthening mechanisms of the ‘heterostructure-dislocation-precipitate’ microstructure enhance both the strength and plasticity.