Cu-2wt%Ag alloy with diameter of 10 mm was fabricated by induction heating directional solidification (IHDS). The effect of different mold temperatures on microstructure of IHDS Cu-2wt%Ag alloy was investigated. The results show that IHDS ­Cu-2wt%Ag alloy is mainly composed of coarse columnar grains at mold temperature of 1075°C. While the mold temperature is at 1100°C, 1150°C and 1200°C, respectively, the IHDS Cu-2wt%Ag alloy is composed of columnar grains and equiaxed grains and the number of grains increases. Meanwhile, the growth direction of columnar grains in the edge of alloys deviates from the direction of continuous casting to form “V” shape. While the mold temperature is controlled at high temperature, the induced current increases, which leads to the enhancement of eddy current in the mold. Therefore, the dendrites fall off to form new grains under the effect of eddy stirring, resulting in an increasing in the number of grains.