Nanoscale Ce-ZrO2 synthesized by cationic surfactant-assisted method, has useful partial oxidation activity to convert palm fatty acid distillate (PFAD; containing C-16-C-18 compounds) to hydrogen-rich gas with low carbon formation problem under moderate temperatures. At 1123 K with the inlet O/C ratio of 1.0, the main products from the reaction are H-2, CO, CO2, and CH4 with slight formations of gaseous high hydrocarbons (i.e., C2H4, C2H6, and C3H6), which could all be eliminated by applying higher O/C ratio (above 1.25) or higher temperature (1173 K). Compared with the microscale Ce-ZrO2 synthesized by conventional coprecipitation method, less H-2 production with relatively higher C2H4, C2H6, and C3H6 formations are generated from the reaction over microscale Ce-ZrO2. The better reaction performances of nanoscale Ce-ZrO2 are linearly correlated with its higher specific surface area as well as higher oxygen storage capacity and lattice oxygen mobility, according to the reduction/oxidation measurement and O-18/O-16 isotope exchange study. (C) 2010 American Institute of Chemical Engineers AIChE J, 57: 2861-2869, 2011