Rare earth oxide doped molybdenum powders were prepared by the reduction of rare earth nitrites doped MoO3. The effect of rare earth oxide on the reduction behavior of molybdenum oxide had been studied by means of Temperature Programmed Reduction (TPR), thermal analysis, X-ray diffraction. Doping rare earth oxide in the powder could lower the reduction temperature of molybdenum oxide and decrease the particle size of molybdenum. The mechanism for the effects had been discussed in this paper.