This research added rare Earth elements Ce to the P110-grade oil casing steel to reveal their influence on the inclusions and tensile properties. The content of cerium in the steel varied from 0 to 452 ppm. Based on the classical thermodynamic calculation, the predominance diagram of Re-containing inclusions in P110-grade steel was obtained. The evolution route of the inclusions composition with the increasing cerium content in the steel was xCaO⋅yAl2O3 → Al2O3–CeAlO3 → Ce2O3–CeAlO3 → Ce2O3–Ce2O2S → Ce2O2S, which agreed well with the thermodynamic analysis. As the cerium content at 235 ppm, the size of Ce containing inclusions has a minimal size at 2.82 μm. Suitable Ce content can modify the big-size xCaO⋅yAl2O3 inclusions into small-size Re-containing inclusions. The results demonstrate that the tensile performance of this steel can be improved as the cerium content increases from 0 to 235 ppm. However, once the cerium content exceeds 235 ppm, further increases in cerium content led to a decline in performance. The experimental results shows that the presence of large-sized Ce2O2S inclusions and the change of microstructure, will lead to the decrease in tensile performance.