The effect of rare-earth oxide (CeO2) on the microstructures in laser melted layer has been studied via X-ray diffraction analysis and transmission electron microscopy techniques. It is shown that in the laser melted layer, the primary crystallization gamma -(Fe,Ni) phase is changed from 3.0 mu m to 1.5 mu m in average size after the addition of rare-earth oxide; while in the eutectic structure, granular CeNi8Si5 phase is identified in the CeO2-addition sample except for the primary crystallization gamma -(Fe,Ni) phase and laminar Fe3B phase which appear in the CeO2-free sample. Electron microscopical evidences show that quantities of W-rich phases with the molecular formula of (Cr,W)(7)C-3, are found in the CeO2-addition sample, it is of orthorhombic structure with lattice parameters of a = 0.494 nm, b = 0.732 nm, c = 1.355 nm.