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Ag microalloyed Sn58Bi has been investigated in this study as a Pb-free solder candidate to be used in modern electronics industry in order to cope with the increasing demands for low temperature soldering. Microstructural and mechanical properties of the eutectic Sn58Bi and microalloyed Sn57.6Bi0.4Ag solder alloys were compared. With the addition of Ag microalloy, the tensile strength was improved, and this was attributed to a combination of microstructure refinement and an Ag3Sn precipitation hardening mechanism. However, ductility was slightly deteriorated due to the brittle nature of the Ag3Sn intermetallic compounds (IMCs). Additionally, a board level reliability study of Ag microalloyed Sn58Bi solder joints produced utilizing a surface-mount technology (SMT) process, were assessed under accelerated temperature cycling (ATC) conditions. Results revealed that microalloyed Sn57.6Bi0.4Ag had a higher characteristic lifetime with a narrower failure distribution. This enhanced reliability corresponds with improved bulk mechanical properties. It is postulated that Ag3Sn IMCs are located at the Sn–Bi phase boundaries and suppress the solder microstructure from coarsening during the temperature cycling, hereby extending the time to failure.