A surfactant-assisted preparation method was successfully used to synthesize the Ce0.8Zr0.2O2 nanophases that had homogeneous chemical composition, enhanced thermal stability and improved catalytic activity. Structural refinement by the Rietveld method confirmed that many cationic lattice defects were formed in the ceria-zirconia crystals due to incorporation of the cationic surfactant in the network of the solid. Zirconium dissolving into cubic structure of ceria improved its thermal stability but led to structure distortion. FT-IR in situ characterization showed that CO chemisorption on the palladium loaded ceria-zirconia catalyst formed linear and multibonded CO-metal complexes. It was also evidenced that CO2 was produced in the CO chemisorption procedure from the pathways of CO disproportionation and CO reacting with lattice oxygen of the catalyst. Owing to high dispersion of the loaded metal palladium and defective structure of the ceria-zirconia support, the Pd/Ce0.8Zr0.2O2 catalyst calcined at a temperature range between 873 and 1173 K not only exhibited a more stable catalytic activity for CO oxidation but also performed a lower light-off temperature at cool start below 373 K in comparison with Pd/CeO2. (C) 2004 Elsevier B.V. All rights reserved.