The effects on the microstructures and phases of coating layers by the addition of micron-sized (m) and nano-sized (n) (m&n) Sm2O3 powders were investigated. The coating materials, which were prepared by means of 2.0 kW CO2 laser cladding, consist of a powder mixture of m Ni-based alloy (NBA) powders comprising 1.5 wt.% m Sm2O3 and 3.0% n Sm2O3 powders. The results indicate that γ-Ni, Cr23C6 and Ni3B are the primary phases of the NBA coatings. The Fe7Sm and Ni3Si phases are highlighted by the addition of m&n Sm2O3 powders. From the substrate, planar crystal layers are first grown in all NBA and m&n Sm2O3/NBA coatings. The dendrite growth then occurs as a result of the addition of the m Sm2O3 powder, and the equiaxed dendrite growth occurs as a result of the addition of the n Sm2O3. With the addition of a rare earth oxide such as Sm2O3 powder, the width of the planar crystal becomes smaller than that of the NBA coating.