CO oxidation was investigated over Ag/CeO2 and CeO2 catalysts prepared by sol-gel method in this work. The catalytic activity of Ag/CeO2 was higher than pure CeO2. The chemico-physical properties of catalysts were characterized by XRD, TEM, XPS, H-2-TPR and Raman spectroscopy. The characterization results indicated that a part of silver was inserted into the lattice of CeO2 and aroused the expansion of lattice. Raman studies of Ag/CeO2 demonstrated that the concentration of oxygen vacancies greatly increased at 5 vol.% CO/N-2 atmosphere and gradually decreased at O-2 atmosphere with the rising temperature from 30 to 300 A degrees C respectively. However, a different behavior was observed over pure CeO2. The obtained Raman results showed that the oxygen storage capability of Ag/CeO2 was superior to that of CeO2 and larger amount of lattice oxygen of the former took part in the oxidation reaction evidenced by changes of oxygen vacancy. On the basis of characterization data, it was proposed that the introduction of Ag into CeO2 facilitated the activation of lattice oxygen and formation of oxygen vacancies. These features may be responsible for the higher catalytic activity of Ag/CeO2 for CO oxidation.