Fe-Al alloys exhibit excellent mechanical properties, low cost, and moderate magnetostriction, making it a promising magnetostrictive material. The polycrystalline Fe81Al19Cex (x=0, 0.05, 0.10, 0.20, 0.30, 0.40) alloys were prepared by arc melting. The effect of trace doping rare earth elements Ce on the microstructure, texture, and magnetostrictive behavior of Fe81Al19 alloys was investigated. The trace doping of the Ce element transforms the equiaxed crystals into columnar crystals, thus significantly improving the volume fraction of favorable η (<001>//rolling direction) texture. The columnar crystal characteristics gradually weaken with the increase of Ce content, leading to weakening of η texture and an increase in the volume fraction of α and γ texture. With the increase of Ce content, a large amount of rich Ce phase formed at grain boundaries and within the grains. Among them, the phases in grain boundaries are mainly composed of rich Ce-Al phases, while the phases within the grains is a composite secondary phase of Ce-Al wrapped around the rich Ce phase. The magnetostriction of Fe81Al19Cex alloy increases first and then decreases with the increase of the Ce element. The peak magnetostriction of 153 ppm was obtained at the Ce element of 0.05%, with an enhancement of 89% compared to the magnetostriction of a binary alloy. This improvement in magnetostriction is attributed to more columnar crystals containing an accurate η texture and the solid solution of trace Ce element leading to the formation of more nanoheterogeneity.