Oil casing steel plays a critical role in the oil and natural gas industry, and its performance is significantly influenced by non-metallic inclusions. Rare earth (RE) elements can effectively modify these inclusions. In this study, industrial experiments were conducted to investigate the effects of rare earth metal alloying on inclusion characteristics during the refining, continuous casting, and hot-rolling processes. The evolution of inclusion morphology, quantity, and size was analyzed using SEM-EDS, FactSage 8.3 thermodynamic software, and an OTS One Bond inclusion analysis system. Results show that when the rare earth content was 4 × 10^-6, the total oxygen content decreased to 7 × 10^-6. In addition, rare earth microalloying transformed Ca-Al-O inclusions into Ca-RE-Al-O inclusions. Following alloying, the inclusion number density in continuous casting billet samples increased from 44 mm^-2 to 46 mm^-2, with the number density of 0-2 μm inclusions rising from 13 mm^-2 to 18 mm^-2, while the number density of 5-30 μm inclusions fell from 7 mm^-2 to 5 mm^-2. Overall, the average inclusion size decreased after rare earth metal addition. XRD and XRF analyses revealed the formation of rare earth phases in the refined slag after vacuum degassing rare earth alloying. Thermodynamic calculations indicate that at 1600 ^oC, the Gibbs formation energies of CaO and CeAlO₃ in steel were -357088.82 and -86892.89 J/mol, respectively, supporting the formation of these inclusions upon rare earth addition. In RE-free furnaces, both thermodynamic calculations and experimental results showed that CaS inclusions formed during solidification, with CaS precipitating around the edges of Ca-Al-O/Ca-RE-Al-O inclusions. In RE-containing furnaces, the addition of rare earth reduced the precipitation of calcium aluminate inclusions, leading instead to the formation of CaO·REAlO₃ inclusions, which likely serve as nucleation sites for CaS precipitation during solidification. During hot-rolling, long strip inclusions were observed in steel without rare earth; however, rare earth alloying improved the deformation ability of inclusions, preventing the formation of long strips due to inclusion crushing. Notably, the modifications induced by rare earth were independent of the inclusions’ Ca content. In hot rolled tube samples without rare earth, only inclusions with moderate Ca content exhibited good deformability. The low yield of rare earth metal was primarily attributed to reactions between the molten steel and refining slag, as well as the removal of rare earth inclusions from the molten steel to the slag.