The structural and electronic properties of Ce1-xCuxO2 nano systems prepared by a reverse microemulsion method were characterized with synchrotron-based X-ray diffraction, X-ray absorption spectroscopy, Raman spectroscopy, and density functional calculations. The Cu atoms embedded in ceria had an oxidation state higher than those of the cations in Cu2O or CuO. The lattice of the Ce1-xCuxO2 systems still adopted a fluoritetype structure, but it was highly distorted with multiple cation-oxygen distances with respect to the single cation-oxygen bond distance seen in pure ceria. The doping of CeO2 with copper introduced a large strain into the oxide lattice and favored the formation of O vacancies, leading to a Ce1-xCuxO2-y stoichiometry for our materials. Cu approached the planar geometry characteristic of Cu(II) oxides, but with a strongly perturbed local order. The chemical activities of the Ce1-xCuxO2 nanoparticles were tested using the reactions with H-2 and O-2 as probes. During the reduction in hydrogen, an induction time was observed and became shorter after raising the reaction temperature. The fraction of copper that could be reduced in the Ce1-xCuxO2 oxides also depended strongly on the reaction temperature. A comparison with data for the reduction of pure copper oxides indicated that the copper embedded in ceria was much more difficult to reduce. The reduction of the Ce1-xCuxO2 nanoparticles was rather reversible, without the generation of a significant amount of CuO or Cu2O phases during reoxidation. This reversible process demonstrates the unusual structural and chemical properties of the Cu-doped ceria materials.