The microstructure of permanent mold cast zinc alloy ZA27 was examined by SEM and TEM after natural aging for 18 months. It was found that the primary alpha' phase, peritectic and eutectic beta phases all decomposed into the equilibrium well-formed alpha+eta lamellae or irregular alpha+eta structure through cellular reaction. The cell colonies nucleated on the interdendritic eutectic eta layer and grew into the primary dendrites, thus first making the beta phase in the dendrite edges decompose, and then the alpha' phase in the dendrite cores. The products from the alpha' phase appeared in regular lamellae rather than irregular particles. In addition, a fine, dense transitional phase alpha'm containing 27.8 mass% Al, with a fcc crystal structure and lattice parameter of about 0.4013nm, formed in alpha lamellae. Copper was preferentially concentrated in Zn-rich eta phase and existed in the form of Cu-rich epsilon phase (CuZr4) particles, with hcp crystal structure and parameters a=0.274nm,c=0.429nm and c/a=1.567.