Selective laser melted (SLMed) 7075 aluminum alloy is prone to cracking due to its poor fluidity, resulting in lower mechanical properties. Erbium (Er) has been shown to have the potential of modifying aluminum alloys to prevent cracking in the traditional manufacturing processes. In the present study, Er modified 7075 aluminum alloy powders were prepared to investigate the influence of Er element on crack elimination in SLM. Nd:YAG laser with wavelength of 1064 nm was employed for the study. Key processing parameters such as laser power and scanning speed were varied to investigate the cracking formation and other defects. The features of defects especially the cracks and the trace of Er element in the alloy were characterized by optical microscopy (OM), scanning electron microscope (SEM), X-ray diffraction (XRD) and transmission electron microscope (TEM). The results show that the crack density is significantly reduced with Er addition while the porosity increases on the other hand. SEM and XRD results show that partial Er addition remains as un-melted and intermetallic compounds of different scales are formed. Coherency between aluminum and nano-scaled intermetallic compound by TEM revealed the effectiveness of Er on refinement of aluminum as well as on eliminating cracks. The underlying mechanism of the crack formation is discussed.