The present study aims to improve the impurity removal step in the rare-earth elements (REE) processing. The fast-growing demand for REE in recent years has attracted special attention to their extraction process. Most of the operating cost associated with the extraction of REE is concentrated in the hydrometallurgical processing of the ores or concentrates. The purity of the final REE product is a valuable key factor to the market. Therefore, impurity removal is an important step in the REE process circuits. This study focuses on improving the neutralization process of sulfate-based REE pregnant leach solutions (PLS), more specifically the Fe and Al removal step. Despite some studies, the mechanism of REE loss during neutralization and impurity removal is still not well understood. Different reagents such as lime, magnesium hydroxide, and sodium hydroxide were investigated in batch experiments. Tests with NaOH presented the minimum REE loss: 17.6% Ce, 20.9% Nd, 24.3% Tb, and 28.8% Er. Tests with Ca(OH) 2 led to highest REE loss values: 33.7% Ce, 42.7% Nd, 42.9% Tb, and 51.6% Er. However, calcium-based reagents offer the greatest economic benefit, owing to their low cost. Therefore, further tests were carried out with Ca(OH) 2 addition to PLS with varying Fe and Al concentrations. REE loss of 16.3% Ce, 17.6% Nd, 5.8% Tb, and 4.5% Er were registered when 4.0 g/L Fe and 4.0 g/L Al were available in the solution, and the pH was increased from 1.0 to 3.2, which was the largest REE loss. The lowest REE loss (4.0% Ce, 4.3% Nd, 0.7% Tb, and 0.6% Er) was observed when the PLS contained 0.5 g/L Fe and no Al. A two-step impurity removal process was proposed based on the results of this study to remove Fe and Al from the REE PLS. Gypsum-Al-Fe residues produced from the neutralization steps were further treated in an acid leaching step to recover above 80% of the lost REE and improve the efficiency of the process.The contributing editor for this article was Yongxiang Yang.