The nickel-based alloy coating with addition of 1.5 % CeO2 was cladded on the surface of 20Cr2Ni4A steel substrate by a Nd : YAG laser with automatic powder feeding system. The microstructure and elements distribution of the coating were investigated by scanning electron microscope (SEM) and energy-dispersive analysis of X-ray (EDAX) respectively. The microhardness was measured by a microhardness tester. The results showed that the microstructure of coating with addition of CeO2 was obviously refined and purified, the spacing of second dendrites was greatly reduced, the content of inclusion was diminished and the growing direction of dendrites became weakened, the microstructure became uniform. As a result of hard phase precipitation and grain refining strengthening, the microhardness of the coatings with addition of CeO2 was increased 40~ 70 HV compared with that of the coating without CeO2.