Monoclinic Sm2O3 ceramics were prepared using the conventional solid-state sintering method. The influences of sintering temperature on structure, morphology, and performance of Sm2O3 ceramics were studied systematically. The excellent microwave dielectric properties (εr = 21.95, Q × f = 47,000 GHz, and τf = +30.15 ppm/°C) were achieved in Sm2O3 ceramic sintered at 1550 °C for 4 h. Interestingly, varying degrees of cracking were observed after the sintered samples were placed for a short time, with the extent depending on the sintering temperatures. The reasons for cracking were analyzed through chemical bond characteristics and microstructure. The analysis of bond valence and microstructure revealed that Sm2O3 ceramics sintered at higher temperatures exhibited larger bond strain index, global instability index, and interplanar spacings. These results suggest that the cracking of Sm2O3 ceramics originates from inner stress resulting from structural variations caused by variations in sintering temperatures. The effect of MgO addition on microwave dielectric properties and stability of Sm2O3 ceramics was also investigated. Phase identification and elemental distribution indicated that MgO existed as a secondary phase. The Sm2O3 ceramic with 20 wt% MgO addition exhibited optimal microwave dielectric properties: εr = 17.72, Q × f = 61,100 GHz, and τf = +2.4 ppm/°C. Importantly, cracking was not observed when MgO addition amounts were 5 wt% or higher. The attractive microwave dielectric properties and favorable stability confirm the possibility of the 5G applications for Sm2O3/MgO composite ceramics.