We have investigated nanoscale compositional and structural variations in Ce0.5Zr0.5O2 samples with different redox properties. Different samples were prepared using a spray freezing technique, and the synthesis conditions were varied to yield materials with reduction temperatures in the range of 400-750 degrees C. X-ray diffraction and thermal gravimetric analysis were used to characterize the average structures and redox properties of these materials. The nanoscale structural and compositional variations in individual nanoparticles of high activity were determined with atomic-scale electron imaging and nanometer-resolution electron energy loss spectroscopy. During the early stage of particle formation, the crystallization process is initiated via the nucleation of ceria-rich nanodomains. This results in the formation of high-surface-area materials that exhibit nanoscale compositional heterogeneity consisting of Ce-rich cores surrounded by Zr-rich shells. The effect of high-temperature redox cycling on the nanoscale structure, composition, and low-temperature redox properties was also determined. Our analysis suggests that our most active material exhibits significant compositional and structural heterogeneity at the nanometer level.