Abstract: To clarify the influence law of of rare earth yttrium(Y) on the inclusions and microstructural properties of pearlitic rail steel, pearlitic rail steel samples with and without rare earth Y addition were taken as the research objects, and the variation laws of inclusions, microstructure, and mechanical properties were systematically analyzed. The results indicated that the addition of rare earth Y refines the average size of MnS inclusions from 9.3 μm to 4.6 μm under 1 000× field of view and reduces the number density from one per three fields of view to one per ten fields of view. It also reduces the average size of TiN inclusions from 4.1 μm to 2.1 μm and decreases the number density from one per three fields of view to one per six fields of view. Al₂O₃ inclusions with an average size 6.7 μm(one per five fields of view) and Al₂O₃-MnS composite inclusions with an average size of 11.7 μm(one per eight fields of view) in the original steel are not detected. Instead, spherical Y-based oxides and oxysulfides with an average size of 1.3 μm and two per field of view are found in the steel. The addition of rare earth Y refines the average interlamellar spacing of pearlite from 0.202 μm to 0.162 μm, reduces the average size of pearlite colonies from 12.63 μm to 9.13 μm, and increases the fraction of high-angle grain boundaries from 18.6% to 22.6%. The tensile strength, yield strength, elongation after fracture, reduction of area and room temperature impact energy of the test steel with rare earth Y addition reach 1 248.7 MPa, 837.3 MPa, 15.8%, 41.3% and 15.0 J respectively. They are increased by 7.2%, 10.9%, 4.80%, 4.84% and 53.3% compared with the test steel without rare earth Y addition. The refinement of pearlite interlamellar spacing is the main reason for the improvement of strength and plasticity of the test steel while the reduction of pearlite colony size significantly promotes the improvement of steel toughness.