The Pd/CeO2 catalyst was successfully prepared by an improved impregnation protocol. The resulting materials possessed relatively high specific surface area and highly dispersed Pd nanoparticles. For low temperature CO oxidation reaction, 2.5 wt% Pd loaded catalyst showed the much higher reaction activity. The total conversion temperature was as low as 40 degrees C under dry condition, much lower than that synthesized by other method. More importantly, the material also showed excellent catalytic activity and stability under moisture condition. When 2.5 vol% H2O was introduced into the feed gas, the catalytic activity showed significantly enhancement, the CO total conversion temperature decreased from 40 degrees C to 30 degrees C. The catalytic mechanism and reaction kinetic study were also discussed in detail. (C) 2014 Elsevier B.V. All rights reserved.