In this paper, we studied in details the nature of the Ag-CeO2 interaction and its influence on the catalytic activity in CO oxidation at low temperature. Ag/CeO2 catalysts were prepared by pulsed laser ablation in liquids (PLA). This method provided the preparation of highly dispersed particles of both an active component and a support. The initial Ag/CeO2 composites did not show activity in the CO oxidation at temperatures <100 °C. However, thermal activation in an oxidizing atmosphere above 450 °C led to a significant improvement of the low-temperature catalytic characteristics and decrease of the activation energy of the reaction by 2 times. A detailed study by physicochemical methods clearly showed that the enhancement of the catalytic properties related to the transition of Ag° particles in contact with CeO2 to ionic Ag+ species. The ionic species were stabilized on the surface of CeO2 without incorporation into the ceria volume. The catalyst activated at 450 °C demonstrated high stability under catalytic conditions due to the effective reversible transition Ag+-CeO2 ↔ Agn°/CeO2, where Agn° – small metal clusters on the CeO2 surface. It is proposed that such reversible transition is facilitated by the defects on the surface of CeO2 nanoparticles. With an increase of the calcination temperature of Ag/CeO2 catalysts above 600 °C, the efficiency of the redox transition decreased due to annealing of CeO2 defects and formation of better-crystallized particles. As a result, catalysts calcined at T>600 °C did not show low-temperature catalytic activity.