In metallurgical practice the presence of a minor amount of certain elements can induce significant changes in a material's physical, mechanical and chemical properties. In this paper we present the nature, morphology and properties of protective coatings containing Cr, Al and minor amounts of a rare earth element, applied on 2.25 Cr-1 Mo low-alloy steel. The coating technology, pack cementation, was used to achieve the simultaneous deposition of the coating elements in a one step process. Cyclic oxidation, conducted in air at 800 °C, induced thermal stresses on the alloy samples, promoting the tendency of the oxide scales formed to spall. The rare earth modified coatings, under these conditions showed the beneficial effects of the rare earth addition. These coatings, upon exposure, developed an adherent oxide scale which had better properties, and retarded the alloy's degradation. This lead to a significant reduction in the overall oxidation rate.