Noble-metal-supported metal oxides (e.g., Au/CeO 2 , Pd/Al 2 O 3 , etc.) are popular as efficient catalysts for many important catalytic reactions, while their high price and easy deactivation restrict their broad application. Herein, we initiate a double substitution methodology to acquire catalysts with merits of excellent catalytic activity, high stability, and relatively low cost. For this purpose, a Au/CeO 2 catalyst was used as reference, and the noble metal Au was completely replaced by the cheaper Ag, meanwhile the rare earth ion, Ce 4+ of the CeO 2 support was partially substituted by the transition metal ion, Fe 3+ . This inversely supported catalyst, Ce 0.9 Fe 0.1 O 1.97 /Ag, was prepared by a two-step method based on co-precipitation and a subsequent liquid-phase reduction. Systematic characterizations demonstrate that Ag nanoparticles with a diameter of around 50 nm were wrapped by Ce 0.9 Fe 0.1 O 1.97 layers. Between the Ag nanoparticles and Ce 0.9 Fe 0.1 O 1.97 layer, there existed a strong interaction. When this sample was tested as a catalyst for CO oxidation, a full conversion temperature of 150 °C was achieved at a space velocity of 24 000 ml h −1 g −1 cat , showing a catalytic activity comparable to that previously reported in the literature on the known catalyst Au@CeO 2 measured at a lower space velocity of 15 000 ml h −1 g −1 cat . More strikingly, this catalyst showed a superb catalytic stability and enhanced oxygen storage capacity. The introduction of smaller Fe 3+ into the CeO 2 lattice and the strong interactions between Ag and Ce 0.9 Fe 0.1 O 1.97 strongly improved the stability and catalytic performance.