Among numerous metal-organic frameworks, rare earth metal-organic frameworks (RE-MOFs) have garnered significant attention across various catalytic fields. As a special class of MOFs, they exhibit high and tunable coordination numbers, diverse crystal structures, strong Lewis acidity, and excellent optical behavior—properties intrinsically linked to their outstanding catalytic performance. This paper presents a comprehensive review of RE-MOFs in catalysis, focusing on their synthesis and modification strategies, advanced characterization techniques, and specific applications. Solvothermal synthesis remains the prevalent method for preparing RE-MOFs, though more environmentally friendly approaches have emerged in recent years. Defect engineering enhances active sites and porosity, doping alters coordination types between organic ligands and metal ions, while MOF-on-MOF structures induce internal charge redistribution and electronic structure modifications—all effective strategies for boosting catalytic activity. Different characterization techniques are required to investigate the oxidation states of rare earth elements and the MOF structures. We list several key characterization methods that best demonstrate their features. Finally, this paper comprehensively summarizes the active sites provided by RE-MOFs and their catalytic principles across various reactions in fields such as energy conversion, environmental remediation, and organic chemistry. This review aims to provide theoretical guidance for designing highly efficient RE-MOF catalysts.