Epoxy resin is a widely used polymer material, while its low mechanical properties and thermal stability limit its use in extreme environments such as high temperature and high pressure. In order to improve the performance of EP, this study assessed the enhancement of mechanical properties and thermal stability of EP by stearic acid-modified n-CeO2 and its mechanism. Laser particle size analyzers, transmission electron microscopes, and other instruments were used to characterize n-CeO2. Universal testing machines, thermogravimetric analyzers, and other instruments were used to test n-CeO2/EP nanocomposites. The results show that fatty acids effectively coated the surface of n-CeO2, reducing its central particle size from 0.248 mu m to 0.193 mu m and improving its dispersion and compatibility. The tensile, flexural, impact strength, maximum decomposition temperature, and glass transition temperature (Tg) increased by 382%, 554%, 698%, 5%, and 10%, respectively with 2 wt% filler content. The scanning electron microscopy (SEM) images showed that the addition of n-CeO2 induced plastic deformation and crack formation in the EP matrix, which enhanced the toughness of the composite material. This study provided the effective methods and basis for the preparation of high-performance n-CeO2/EP nanocomposites.