By adopting a simple cost effective microwave-assisted synthesis methodology, nanosized ceria-zirconia solid solution (MW) has been prepared. For comparison purpose, ceria-zirconia solid solution with the same composition was also synthesized by a coprecipitation method (CP) and calcined at 773 K. Both the samples were examined by different characterization techniques namely, X-ray diffraction, Raman spectroscopy, X-ray photoelectron spectroscopy, transmission electron microscopy, BET surface area and other methods, and evaluated for CO oxidation activity. XRD studies revealed formation of monophasic Ce0.5Zr0.5O2 solid solution in the MW sample and Ce0.5Zr0.5O2 solid solution in the CP sample. TEM studies showed the presence of nanometre sized particles with broad particle size distribution in the sample prepared by microwave method. Raman spectroscopy and oxygen storage capacity measurements suggested the presence of more oxygen vacancies and lattice defects in the MW sample. XPS studies indicated a high reducibility and surface enrichment of Ce3+ ions in the MW sample. Higher CO oxidation activity and lower light off temperature was observed for the microwave synthesized sample in comparison to that of coprecipitated sample.