This study employs various petrological and mineralogical testing techniques—including basic chemical analysis, X-ray diffraction (XRD), scanning electron microscopy (SEM), and rare earth leaching experiments—to conduct a detailed mineralogical investigation of the Paleogene continental sedimentary-type rare earth deposit in the Lianfeng area of Yongshan, Zhaotong, Yunnan Province. Analytical results indicate that the average total rare earth oxide (TREO) grade ranges from 0.12% to 0.21%, with the highest single sample reaching 0.23%. The light-to-heavy rare earth ratio falls between 1.55 and 2.88, indicating a predominance of light rare earth elements (LREE), which account for 61%–73% of the total rare earth content. The mineral composition is dominated by clay minerals, accounting for approximately 75% of the total, primarily kaolinite (45%), followed by montmorillonite (36%) and chlorite (19%). Other minerals are present in minor amounts, with very few independent rare earth minerals identified. Leaching tests and measurements reveal that the ion-adsorbed phase constitutes only 0.94%–3.86% of the total rare earth content, indicating a relatively low proportion of rare earth elements in ionic form. The research findings suggest that the rare earth elements in the samples may be hosted within nano-sized, rare-earth-enriched mineral particles embedded in clay minerals such as kaolinite.