Two synthetic approaches to the preparation of Au/Fe2O3 nanocatalysts were compared: a novel deposition-precipitation technique utilizing thermal decomposition of urea and the conventional coprecipitation method. The products were characterized by X-ray powder diffraction, transmission electron microscopy, X-ray photoelectron spectroscopy (XPS), and temperature programmed reduction. The catalysts prepared by both methods demonstrated very high activity toward CO oxidation in the "as prepared" state. Starting with the same amount of gold precursor, the deposition-precipitation technique produces a catalyst with higher final gold content than the coprecipitation method because it achieves more complete precipitation of the gold from solution. Heat treatment of the samples prepared by both methods resulted in a decrease of the catalytic activity by about an order of magnitude. However, we conclude that heat-treated Au/Fe2O3 catalysts are more suitable for practical applications because of stability issues with the "as prepared" samples.