The precise control of non-metallic inclusions is crucial for high-end GCr15 bearing steel. This study investigates cerium (Ce)-induced inclusion modification mechanisms. Smelting experiments with 0 to 0.017 wt% Ce additions, high-temperature in situ observations, thermodynamics, and first-principles calculations were used to evaluate inclusion evolution and aggregation behaviors. Without Ce, coarse Al₂O₃ and MnS phases dominate. As Ce increases to 0.017 wt%, inclusions evolve sequentially into CeAlO₃, Ce₂O₃, and ultimately, finely dispersed Ce₂O₂S and CeS. Thermodynamics indicate CeAlO₃ nucleates preferentially, acting as heterogeneous nucleation sites for MnS. In situ observations and interparticle force calculations reveal an aggregation tendency order of Al₂O₃ > CeAlO₃ > Ce₂O₃ > Ce₂O₂S. Furthermore, first-principles simulations confirm that Ce₂O₂S possesses the lowest formation energy and optimal stability, wherein Ce effectively modifies coarse inclusions into fine, well-dispersed spherical particles. Coupled with its intrinsic deoxidizing and desulfurizing effects, Ce addition synergistically modifies coarse inclusions into fine, well-dispersed spherical particles. These findings elucidate the rare-earth modification micro-mechanisms, providing a theoretical foundation for manufacturing high-quality bearing steel.