Laser cladding has unique advantages in improving the wear resistance of materials or workpiece surfaces. CeO2 could play a role in promoting the flow of the molten pool and grain refinement during the laser cladding process, which is likely to further improve the wear resistance of the coating. In this work, CeO2 was introduced into the MgAl2O4/Fe-based laser cladding coating on the surface of GCr15 steel. The effects of the CeO2 content on the phase composition, microstructure, hardness, and wear resistance of the coatings were also systematically investigated. The results showed that the addition of CeO2 enhanced the continuity of the coating and reduced the size of the MgAl2O4 particles, which was associated with the addition of CeO2’s intensification of the melt pool flow. The metal grain size reduced and then increased as the CeO2 content increased, whereas the hardness and wear resistance of the MgAl2O4/Fe-based coatings increased and then decreased. Compared with the MgAl2O4/Fe-based coating without CeO2, the hardness of the MgAl2O4/Fe-based coating with 1.0 wt% CeO2 increased by 10% and the wear rate decreased by 40%, which was attributed to the metal grain refinement and particle dispersion strengthening.