The Black-Scholes equaTION is one of the most important mathematical models in opTION pricing theory, but this model is far from market realities and cannot show memory e, ect in the , nancial market. This paper investigates an American opTION based on a time-fracTIONal Black-Scholes equaTION under the constant elasticity of variance (CEV) model, which parameters of interest rate and dividend yield sup-posed as deterministic funcTIONs of time, and the price change of the underlying asset follows a fractal transmission system. This model does not have a closed-form soluTION,hence, we numerically price the American opTION by using a compact di, er-ence scheme. Also, we compare the time-fracTIONal Black-Scholes equaTION under the CEV model with its generalized Black-Scholes model as ,= 1 and ,= 0. Moreover, we demonstrate that the introduced di, erence scheme is uncondiTIONally stable and convergent using Fourier analysis. The numerical examples illustrate the e, ciency and accuracy of the introduced di, erence scheme.