Effects of rare earth elements (RE) on modification of inclusions, the corrosion dynamic laws and the electrochemical properties of low carbon steel in Compact strip production (CSP) technology have been investigated with SEM, EDS and polarization curve measurements. The results show that the RE elements play an important role on the morphology and type control of inclusions and also reduce their size in low carbon steel. The corrosion is mitigated due to relatively compact corrosion products and the dispersion spherical RE oxides and/or oxy-sulfides inclusions with the addition of RE. Meanwhile, the electrochemical measurements show that the corrosion current density of low carbon steel with RE is lower than that of steel without RE. The corrosion resistance is improved to a certain extent by RE.