The effect of a rare earth (RE) surface treatment on the mechanical and tribological properties of carbon fiber (CF) reinforced polytetrafluoroethylene (PTFE) composites was experimentally investigated. The tensile properties of the CF reinforced PTFE (CF/PTFE) composites treated with air oxidation and RE modifier were superior to those of untreated CF/PTFE composites, while RE treatment was most effective in promoting the tensile strength and strain at break of the CF/PTFE composite. The bending strength of the RE treated CF/PTFE composite was improved by about 16% compared with that of untreated composites, while 2% improvement was achieved by air oxidation. Under oil-lubricated conditions, RE treatment was more effective than air oxidation to reduce the friction coefficient and wear of PTFE composite. RE treatment effectively improved the interfacial adhesion between CF and PTFE. The strong interfacial coupling of the composite made CF not easy to detach from the PTFE matrix, and prevented the rubbing-off of PTFE, accordingly improved the friction and wear properties of the composite.