Nanosized Ce0.5Zr0.5O2 solid solution has been synthesized by microwave-induced solution combustion method (MWCZ) and compared with that of a Ce (x) Zr1-x O-2 solid solution with the same composition but prepared by the conventional coprecipitation method (CPCZ) and calcined at 773 K. X-ray diffraction and cell parameter studies revealed the incorporation of more zirconia and formation of more defect sites in the ceria lattice of the material prepared by microwave method. Raman spectroscopic measurements suggested the presence of oxygen vacancies, lattice defects and displacement of oxygen ions from their ideal lattice positions. X-ray photo electron spectroscopic studies indicated a high reducibility and surface enrichment of Ce3+ ions in the MWCZ sample. Better oxygen storage capacity and CO oxidation activity was observed for MWCZ in comparison to that of CPCZ sample. The significance of the microwave method lies mainly in its simplicity, flexibility, and easy control of different factors that determine the activity of the mixed oxide.