Abstract: Ag₃Sn in SnAgCu solder formed by Ag and Sn has a pivotal role in reliability of solder joints due to its brittle nature and high resistivity. Therefore, it is necessary to confirm the phase transformation process and mechanism of Ag₃Sn to control its growth. The domain diffusion element and atom movement pathway in Ag-Sn system was investigated by using the empirical electron theory (EET) of solids and molecules, which clearly described the formation of Ag₃Sn from the aspect of electron level. The valence electron structures of Ag, Sn, Ag₃Sn and probable solid solutions in Ag-Sn system have been calculated by self-consistent bond length difference (SCBLD) method. Results show that the domain diffusion element is Sn in Ag-Sn system. Sn atoms first come into Ag unit cell to form solid solution. Atoms in solid solution units rearrange to form new covalent bonds that have higher cohesive energy and well-distributed in units. The new covalent bonds cause lattice to expand, which leads to movement of Ag atoms in solid solution. Ag₃Sn with good symmetry forms, which verifies former studies about Ag-Sn system diffusion.