The formation of fine Sn grains in a Sn-1.2 mass%Ag-0.5 mass%Cu-0.05 mass%Ni solder due to thermal strain was investigated from the viewpoint of recrystallization. After thermal fatigue, small general grains recrystallized at the strain concentrated location in Sn-1.2Ag-0.5Cu-0.05Ni. Through isothermal annealing, however, grains, which had near h110i orientation at a chip-substrate direction before isothermal annealing, coarsened preferentially. Hence, not isothermal annealing but thermal strain was a driving force for recrystallization. Both grain growth after recrystallization and coarsening of recrystallized grains in Sn-1.2Ag-0.5Cu-0.05Ni were slower than those in Sn-1.2 mass%Ag-0.5 mass%Cu, which suppressed crack initiation and increased fatigue life of Sn-1.2Ag-0.5Cu-0.05Ni.