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• Both micro-sized inclusions and fine precipitates were statistically analyzed. • Proper La addition reduced inclusions, and enhanced grain size and texture factors. • The steel with 0.0006 wt% La possessed the best magnetic properties. • Excess rare earth sulfides deteriorated grain size and textures of steels. The effect of rare earth elements (REMs) on the magnetic properties of non-oriented electrical steels was studied using industrial trials. The variation of the magnetic properties was discussed in terms of the effect of inclusions, precipitates, grain size, and textures in the steel with and without REMs. Inclusions of MgO·Al 2 O 3 -CaS and (Mg, Mn, Ca)S in REMs-free steel were modified into composite ones of MgO·Al 2 O 3 -LaAlO 3 , La 2 O 2 S-MgO and (La, Ca)S in the steel with 0.0006% lanthanum, and to (La, Ce) 2 O 2 S-CaS-MgO, (Ce, La)S in the steel with 0.0007% lanthanum and 0.0015% cerium. The number density of fine MnS was remarkably decreased by the addition of REMs, leading to an increase in the average grain size. The steel containing 0.0006 wt% lanthanum possessed the best combination of core loss and magnetic induction due to the decrease of micro-sized inclusions and fine MnS, the increase of grain size, and the optimization of recrystallization textures. For the steel with excess REMs addition, the large number density of rare earth sulfides with the size of approximately 1 μm tended to deteriorate the grain size and textures. [ABSTRACT FROM AUTHOR]