Rare earth (RE) elements not only modify inclusions but also refine the steel's microstructure. This study investigates the evolution mechanism of cerium on inclusions and microstructure in low-alloy cast steel through experimental and thermodynamic analyses. After cerium is added to the steel, strip-like inclusions transform into spherical ones, accompanied by a reduction in size. The evolution path of inclusions follows MnS + MnS–Al2O3→Ce2O2S–Ce2S3–MnS + CeAlO3–Ce2S3–MnS with cerium addition. Notably, Ce2S3 and Ce2O2S exhibit an orientation relationship, with [1‾ 22]Ce2S3//[01 1‾ 1]Ce2O2S and (02 2‾)Ce2S3//(1‾ 011)Ce2O2S. Compared to Ce-free steel, the Ce-0.06 steel shows a reduced grain size and the absence of needle-shaped Widmanstätten structures, which may be mainly attributed to rare earth inclusions as heterogeneous nucleation of δ-Fe. This work can provide a theoretical basis for improving the overall mechanical properties of low-alloy cast steel by adding cerium.