The effects of RE on the inclusions and the mechanical properties of 10PCuRE steel were studied. The results show that the morphologies and sizes of inclusions in 10PCuRE steel are changed, and RE played a very good role of modifying inclusions. Fracture is changed from cleavage to ductile fracture by adding RE to 10PCuRE steel. And the mechanical properties of 10PCuRE are improved. In comparison with 10PCuRE steel without RE, the transverse impact toughness of 10PCuRE steel with RE is increased 30.15% at -20°C, and the tensile strength and reduction of area have been improved 27.14%, 8.9%, respectively.