The effects of a minor addition (0.4 wt%) of Ag to Al-5.1Cu-1.0 Mg aluminum alloy on the microstructural evolution and mechanical properties have been investigated. The under-ageing, peak ageing, over-ageing, and prolonged ageing at 185 °C were studied for the alloys with and without Ag additions to further correlate the microstructure with mechanical properties. The faster increment of hardness during the early stage (1–5 h) and much higher ultimate tensile strength (530 Mpa) at peak ageing condition in Ag-containing specimen were attributed to the formation of the Ω phase triggered by the Ag addition. In over-aged specimens, the S phase in the Ag-free specimen coarsened significantly, whereas the S phase in the Ag-containing specimen remained nearly the same size as that in its peak-ageing treated specimen. The formation of the Ω phase in the Ag-containing specimen presumably consumed the same solute atoms as the S phase, i.e., Cu and Mg, leading to the depleted zones of Cu–Mg in the aluminum matrix and thus suppressing the coarsening of the S phase during the ageing time from 11 h (peak ageing) to 18 h (over ageing). After ageing for 100 h (prolonged ageing), the S phase coalesced in both alloys. However, the Ω phase in the Ag-containing specimen still maintained a thickness of ∼3 nm with a high level of volume percent (2.74 vol %), which contributed significantly to the UTS (449 MPa).