<p>Although 45 steel is a common medium-carbon quenched and tempered structural steel used extensively in the production of vital moving components, wear, corrosion, and fatigue can cause the steel’s surface to fail. This work used the High Speed Laser Cladding (HSLC) process to create Inconel 625 nickel-based coatings with varying Y₂O₃ contents (0 wt%, 0.5 wt%, 1.0 wt%, and 2.0 wt%) on 45 steel substrates in order to enhance their surface performance. The impact of Y₂O₃ on the coatings’ microstructure, mechanical characteristics, and corrosion resistance behavior was thoroughly investigated. The findings demonstrated that adding 1.0 wt% of Y₂O₃ may greatly refine the grains, encourage the conversion of coarse columnar crystals into fine columnar and equiaxed crystals, inhibit element segregation, and enhance microstructure density and uniformity. By combining several mechanisms, such as dispersion strengthening (undissolved Y₂O₃ particles), precipitation strengthening (Cr₂₃C₆, Cr₇C₃ carbides), solid solution strengthening, and fine grain strengthening, the component coating’s microhardness increased to 371.24 HV₁, its wear rate decreased to 2.29 × 10 ^− 4 mm³/N·m, and its self-corrosion current density was only 3.2027 × 10 ^− 6 A/cm². It has outstanding resistance to corrosion and wear. However, adding too much Y₂O₃ (2.0 wt%) causes increased porosity, crack propagation, and particle agglomeration, which results in stress concentration and performance loss. In addition to offering theoretical support for the composition design and process optimization of high-performance nickel-based composite coatings, this study discovered the “critical concentration effect” of Y₂O₃ in high-speed laser cladding Inconel625 coatings. It also holds significant application prospects in the areas of surface strengthening and remanufacturing of essential parts of high-end equipment.</p>