A rare-earth-containing ultrahigh strength collapse-resistant petroleum casing and a production method thereof belong to the technical fields of ferrous metal smelting and metal press working. The petroleum casing comprises the following raw materials by weight percent: 90% of blast furnace molten iron and 10% of high quality steel scrap. The casing blank comprises the following chemical components by weight percent: 0.18-0.35% of C, 0.10-0.35% of Si, 0.55-1.10% of Mn, less than or equal to 0.025% of P, less than or equal to 0.020% of S, 0.60-1.10% of Cr, 0.15-0.50% of Mo, 0.01-0.03% of Al, 0.0005-0.0100% of RE ( RE is the mixed rare earth metals of Ce and La and the weight percents of Ce and La are 67% and 33% respectively), less than 0.10% of Cu, less than 0.10% of Ni and the balance of Fe and trace elements. The process flow of the production method is as follows: pretreating molten iron, smelting in a top-bottom blowing converter, refining in a ladle furnace (LF), performing VD vacuum treatment, performing continuous casting of round billets, performing flame cutting, heating the casing blanks, boring, performing continuous rolling, performing sizing and diameter reducing, cooling, performing saw cutting, performing heat treatment, straightening, performing flaw inspection and lathing screw threads. The mechanical properties of the petroleum casing are as follows: the strength is no less than 140000PSI, the residual stress is no more than 80MPa, the impact power is no less than 80J and the grain size is no less than the grade 8. The product is characterized in that the residual stress is low, the content of harmful elements is low, the impact toughness is high, the grains are small, and the product resists extrusion and is difficult to damage.