The effect of rare-earth La2O3 on laser-clad coatings has been studied. For this purpose, nickel-based alloy powders with different contents of La2O3 were laser-clad on to a steel substrate. The clad coatings were examined and tested for microstructural features, microhardness, inclusions and phase composition. The results are compared with those for coatings without La2O3. The comparison indicates that additions of La2O3 refine the microstructure of the clad, and the coating increases its microhardness. Moreover, the wear resistance and corrosion resistance of the clad coatings are also enhanced.