With the requirements of high current, long-chain carbon, and higher Faraday efficiency, the electrochemical reduction of carbon dioxide by traditional Cu-based catalysts has certain limitations in kinetics. In contrast, the catalysts containing rare earth elements have the characteristics of multiple valence states and 4f orbitals, which can control the bonding of reaction product intermediates to the active sites of catalyst metals. That can reduce the energy barrier and band gap value of the reaction speed control step, and hasten the electron transfer during the carbon dioxide electrochemical reduction reaction, providing a new idea for carbon dioxide electrochemical reduction reaction. In this paper, the reasons and processes of rare earth nanomaterials in carbon dioxide electrochemical reduction from discovery to application are reviewed, the reaction principle for the formation of carbon-containing compounds is discussed in detail, and the incorporation of rare earth elements affects the performance of copper-based catalysts is further discussed. According to the number of carbon-containing atoms, the products are mainly divided into C1, C2, C3, and C3+. Finally, this paper retrospects the current application advances of rare-earth-based nanomaterials in carbon dioxide electrochemical reduction reactions. It makes a rational foreground for developing rare-earth-based nanomaterial in carbon dioxide electrochemical reduction reactions.