The effect of RE addition on the high temperature oxidation behavior of HP40 alloy was studied by SEM, EDS and XRD. The smallest mass gain of the sample with RE addition (Y addition) after 120 h oxidation at 1100 oC is 16.24 g/m2, much lower than that of the sample without RE addition (36.45 g/m2) oxidized under the same condition. The results indicate that RE can improve the high temperature oxidation resistance of HP40 alloy effectively. By analyzing the structure of the oxide scale, it can be inferred that RE addition helps to keep a continuous spinel outer layer while such layer on the sample without RE addition is discontinuous. Moreover, RE addition facilitates the formation of internal oxide, which penetrates into the matrix and increases the contact area with the matrix. As a result, it improves the scale adherence and inhibits the spallation.