The use of a heterogeneous Lewis acid catalyst, which is insoluble and easily separable during the reaction, is a promising option for hydrolysis reactions from both environmental and practical viewpoints. In this study, ceria showed excellent catalytic activity in the hydrolysis of 4-methyl-1,3-dioxane to 1,3-butanediol in 95% yield and in the one-pot synthesis of 1,3-butanediol from propylene and formaldehyde via Prins condensation and hydrolysis reactions in an overall yield of 60%. In-depth investigations revealed that ceria is a water-tolerant Lewis acid catalyst, which has seldom been reported previously. The ceria catalysts showed rather unusual high activity in hydrolysis, with a turnover number (TON) of 260, which is rather high for bulk oxide catalysts, whose TONs are usually less than 100. Our conclusion that ceria functions as a Lewis acid catalyst in hydrolysis reactions is firmly supported by thorough characterizations with IR and Raman spectroscopy, acidity measurements with IR and P-31 magic-angle-spinning NMR spectroscopy, Na+/H+ exchange tests, analyses using the in situ active-site capping method, and isotope-labeling studies. A relationship between surface vacancy sites and catalytic activity has been established. CeO2(111) has been confirmed to be the catalytically active crystalline facet for hydrolysis. Water has been found to be associatively adsorbed on oxygen vacancy sites with medium strength, which does not lead to water dissociation to form stable hydroxides. This explains why the ceria catalyst is water-tolerant.