The control of inclusion features, i.e., chemical composition, distribution, quantity, and size, is in high demand for stainless steels to achieve good surface quality, pitting corrosion resistance, and mechanical properties. In this paper, the effects of rare earth (RE) modification on the inclusions of martensitic stainless steel were explored. Martensitic stainless steels with various contents of Ce were prepared, and the inclusions in the cast billets were characterized by field emission scanning electron microscopy (FE-SEM) and an automatic analysis system for nonmetallic inclusions in steels (OTS). The effect of Ce on the modification of nonmetallic inclusions during solidification was explored with thermodynamic calculations. The results showed that the addition of Ce modified the oxygen and sulfur inclusions by transforming them from irregular elongated inclusions to nearly spherical RE composite inclusions. Compared with those in basic martensitic stainless steel, nine types of RE inclusions were found in the presence of Ce. As the Ce content increased from 0.048 wt% to 0.092 wt%, the CeAlO3 content decreased, whereas the Ce2O2S content increased. Moreover, there were 80% fewer inclusions than in the basic martensitic stainless steel.