Intra-granular Acicular Ferrite (IAF), as one of the most well-known desirable microstructure of ferrite with a chaotic crystallographic orientation, can not only refine the microstructure and retard the propagation of cleavage crack but also provide excellent combination of strength and toughness in steel. The effect of adding cerium on microstructure and controlling proper cerium-based inclusions in order to improve properties in low-carbon commercial steel (SS400) were investigated. The type of inclusions can be controlled by changing S/O ratio and Ce content. Without Ce modification, MnS is a dominate inclusion. After adding Ce, the stable inclusion phases change from AlCeO3 to Ce2O2S. The optimum amount of cerium, 0.0235 wt.%, lead in proper grain refinement and formation of cerium oxide, oxy-sulfide and sulfide inclusions. Having a high amount of cerium results in increasing the number of inclusions significantly as a result it cannot be effective enough and the inclusions will act like barriers for others. It is found that the inclusions with a size of about 4∼7 μm can serve as heterogeneous nucleation sites for AF formation. Thermodynamic calculations have been applied to predict the inclusion formation in this molten steel as well, which show a good agreement with experimental one.