Oxidation of methane and carbon monoxide was carried out on silver/ceria composite oxide prepared by co-precipitation, and the behavior of the lattice oxygen of silver was investigated. In the high temperature oxidation of methane, silver(I) oxide decomposed and aggregated to large particles of metallic silver and rapidly deactivated. On the other hand, silver retained high activity during the low temperature oxidation of carbon monoxide. It was found, however, that ceria accelerated the desorption of the lattice oxygen of silver, which was assumed to be related to the well known oxygen storage function of ceria. Although silver tends to be converted more easily to metallic state in the presence of ceria, the function of ceria of sustaining the dispersed state of silver will help to maintain the high activity of the latter in the oxidation of carbon monoxide.