The wide popularities of grain refiner and modifier in aluminum alloy industry enable us to achieve improved properties and performances. Here, using aluminothermic reaction between nano-oxide particles (ZnO, ~20nm in size) and aluminum alloy (A356), the microstructure refining effect on aluminum alloy is investigated. By the incorporation of nanoparticles with semi-solid melt treatment, the coarse primary aluminum dendritic microstructures are transformed to more fine and equiaxed structure showing improved mechanical properties. Converting mechanisms are interpreted in terms of the nucleation site increment, as well as the grain growth restriction, by decomposition and dissolution of the nano-oxide particles in aluminum alloy melt.