Fe–Al/Cr3C2 composite coatings produced from high-velocity flame spraying (HVFS) are Fe–Al intermetallic composite coatings with remarkable room-temperature and high-temperature properties. However, Fe–Al/Cr3C2 composite coatings have a Cr3C2 content of 50%. This causes the coatings to become porous and limits its room-temperature and high-temperature properties. In order to improve microstructure and properties of Fe–Al/Cr3C2 composite coatings, Fe–Al/Cr3C2RE, including Fe–Al/Cr3C2 and CeO2, is sprayed by HVFS technology onto AISI 1020 steel. The properties including bonding strength and high-temperature corrosion-resistance of Fe–Al/Cr3C2RE composite coating are tested at 25°C and 650 °C. For comparison, two other materials, substrate AISI 1020 steel and Fe–Al/Cr3C2 composite coating, are tested under the same experimental conditions. The microstructures of the coatings are analyzed by scanning electronic microscopy (SEM), the cross-section morphology of Fe–Al/Cr3C2RE composite coating is analyzed by energy-dispersive spectroscopy (EDS), and the existing states of oxides are analyzed by transmission electron microscopy (TEM). The phases of the composite coating after corrosion are analyzed by X-ray diffraction (XRD). The results demonstrate that the properties of Fe–Al/Cr3C2RE composite coatings is better than that of either AISI 1020 steel or the Fe–Al/Cr3C2 composite coating. CeO2 is a surface-active agent, and it significantly improves the microstructure and properties of Fe–Al/Cr3C2RE composite coating. CeO2 improves the bonding strength of Fe–Al/Cr3C2RE composite coating by reducing the surface tension of droplet and enhancing its fluidity as well as wetting capacity on the surface of the substrate, decreasing the internal stress of coating.Adding CeO2 to the coating produces Al2O3 and Cr2O3 oxide films, which protect the substrate AISI 1020 steel from corrosion more efficiently.