During welding thermal cycles, magnesium alloys are highly susceptible to grain coarsening and structural changes of precipitates, leading to microstructural damage and subsequently deteriorating the performance of welded joints. Consequently, mitigating the strength degradation of magnesium alloys during welding has attracted considerable research attention in the field of magnesium alloy processing. In this study, an ultrasonic vibration-assisted solid-state joining process is employed to join a Ce-containing rare-earth magnesium alloy, and the microstructural evolution and strengthening mechanisms of the joints are systematically investigated. The results indicate that the acoustic plasticity and thermal effects induced by ultrasonic vibration promote intense dynamic recrystallization at the contact interface, resulting in significant grain refinement within the ultrasonic-affected zone, with grain sizes reduced from 250 μm in the base metal to 10-30 μm in the joint region. Simultaneously, the high-frequency mechanical shearing generated by ultrasonic vibration fragments coarse precipitates into uniformly distributed micro- and submicro-sized particles, thereby significantly enhancing precipitation strengthening. In addition, the segregation of rare-earth element Ce at the grain boundaries leads to the formation of thermally stable phases, which effectively pin grain boundaries and suppress dislocation motion, thereby mitigating microstructural degradation during the joining process. Mechanical testing demonstrates that the synergistic effects of grain-refinement strengthening, dispersion strengthening, and rare-earth strengthening enable the joint to achieve a lap-shear strength of 194.9 MPa, equivalent to 92.4% of the base metal strength. Additionally, the fracture mode transitions from interfacial brittle fracture to matrix ductile fracture. The findings provide theoretical basis and technical guidance for the development of low-damage, highly reliable joining technologies for rare-earth magnesium alloys.