Lead-free solder alloy is popular in electronic industry due to its environmental friendly characteristic. However, the interfacial reaction faces the thermal challenge caused by the increased melting temperature of lead-free solder alloy. In the present work, a composite Ni-P-ZrO2 (15 at.% of P) layer was developed by electroless plating as novel under bump metallization (UBM). In order to homogeneously disperse ZrO2 nanoparticle in the Ni-P layer, ultrasonic vibration and magnetic stirring were adopted. The interfacial reaction between electroless Ni-P-ZrO2 layer and lead-free solder alloy was systematically investigated by scanning electronic microscopy (SEM) with EDX. The microstructure shows Ni3Sn4 layers growth at a lower rate in solder/Ni-P-ZrO2 joint compared with solder/Ni-P joint. The top-view intermetallic compounds (IMCs) layer in ZrO2 doped sample demonstrated a refined grain size. The consumption rate of amorphous UBM to crystalline Ni3P phase is limited in solder/Ni-P-ZrO2 joint due to the ZrO2 nanoparticle addition. Moreover, the ZrO2 nanoparticle doped sample consistently demonstrated higher shear strength than plain solder joint as a function of the number of reflow cycles. Therefore, Ni-P-ZrO2 UBM not only suppress the excess growths of IMC layer but also helps to reinforce the mechanical property of solder joint, thus improve the reliability of the interconnect.