Ag/CeO2 nanosphere catalysts, prepared by a one-step hydrothermal method, were used to eliminate the indoor formaldehyde (HCHO) pollution. The activity test results showed that Ag/CeO2 nanosphere catalysts exhibited much higher catalytic activity than normal Ag/CeO2 particles prepared by conventional impregnation method. Ag/CeO2 nanosphere catalysts could reach complete HCHO oxidation above 110°C under relatively high space velocity. The specific reaction rate per second and per unit of surface area of Ag/CeO2 nanosphere catalysts were almost 3.6 times higher than normal Ag/CeO2 particle catalysts at 110°C. The prepared catalysts were also characterized by various methods. HRTEM, BET, and XRD results showed that Ag/CeO2 products were nanosphere shapes with average sizes around 80–100nm, and were comprised of many small particles with a crystallite size of 2–5nm. Cerium and silver were well distributed throughout the individual Ag/CeO2 nanosphere crystal. According to the results in XPS, H2-TPR, O2-TPD, and Raman spectra, surface chemisorbed oxygen easily formed on the Ag/CeO2 nanosphere catalysts. The synergetic interaction might exist between Ag and CeO2 nanosphere, and the presence of silver could facilitate surface chemisorbed oxygen activation, which mainly contributed to the HCHO oxidation. Based on In-situ DRIFTS results, formate species (HCOO−) were found to be the key intermediates and be activated on the surface active oxygen of Ag/CeO2 nanosphere catalysts in the catalytic oxidation process of HCHO, which would be further oxidized into the final product water and carbon dioxides.