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With the integration of Artificial Intelligence (AI) and Internet of Things (IoT), the Federated Edge Learning (FEL), a promising computing framework is developing. However, there are still unsolved issues on communication efficiency and data security due to the huge models and unreliable transmission links. To address these issues, this paper proposes a novel federated edge learning system, called LightFed, where the edge nodes upload only vital partial local models, and successfully achieve lightweight communication and model aggregation. First, a novel model aggregation method Model Splitting and Splicing (MSS) and a Selective Parameter Transmission (SPT) scheme are proposed. By detecting the updating gradients of local parameters and filtering significant parameters, selective rotated transmission and efficient aggregation of local models are achieved. Second, a Training Filling Model (TFM) is proposed to infer the total data distribution of edge nodes, and train a filling model to mitigate the unbalanced training data without violating the data privacy of individual users. Moreover, a blockchain-powered confusion transmission mechanism is proposed for defending the attacks from external adversaries and protecting the model information. Finally, extensive experimental results demonstrate that our LightFed significantly outperforms the existing FEL systems in terms of communication efficiency and privacy security. [ABSTRACT FROM AUTHOR]