The CeO2-added Y–Ba–Cu–O oxides were prepared by two different processes, the conventional solid-state reaction process and the partial melt process using powders, to examine the effect of the dopant on microstructure, microhardness, and superconductivity. In the solid-state reacted sample, most of the added CeO2 was converted to a form of BaCeO3, but some might enter into the 1-2-3 phase, resulting in the orthorhombic-to-tetragonal phase transition that accompanied the disappearance of twin structure in 1-2-3 grains. In the partially melted sample, however, the phase change was not observed up to 5 wt. % of CeO2. All the added CeO2 in these samples was consumed to form only BaCeO3 which was finely dispersed in large 1-2-3 grains during the peritectic reaction stage. The zero resistance temperature (Tc) of the solid-state reacted sample gradually decreased with increasing CeO2 content due to the phase change and the formation of BaCeO3, whereas the Tc of the partially melted sample was nearly constant regardless of CeO2 content up to 5 wt. %, owing to the separation of the second phase from the 1-2-3 superconducting phase. Microhardness of the partially melted sample increased with increasing CeO2 content. The strengthening effect appears to come from the composite system where the fine BaCeO3 particles are dispersed in a 1-2-3 matrix.