Nanophase Ce-Cu-O powder has been synthesised via co-precipitation approach, whereas computer-assisted thermodynamic modelling was used to predict the optimum experimental criteria. The properties of Ce-Cu-O composite (10 mol% CuO) have been extensively investigated by a variety of techniques. The obtained materials show different morphology compared to other doped ceria salts, with uniform distribution of Ce and Cu throughout the powder. Detailed XRD study does not show the formation of solid solution and the composites consist of two separate metal oxides. X-ray absorption spectroscopy study shows a variation of the existence of Cu and Ce in several oxidation states. Copper oxide seems to exist evenly distributed along the surfaces and boundaries of the crystal grains of CeO2 on the nanoscale. The temperature-programmed reduction indicated that Ce-Cu-O composite has an enhanced oxygen storage capacity compared to CeO2 or pure copper oxide.