Silica supported cobalt catalysts have been prepared using urea containing cobalt nitrate solution impregnation method, which can give high loading Co3O4 with relatively smaller crystallite size. Compared to the conventional impregnation method, the catalyst prepared with urea added to the cobalt nitrate solution provides higher activity for CO conversion and C5+ selectivity. To optimize the catalyst activation and simulate the industrial activation, TPO–TPR cycle treatment with or without steam has been applied to the prepared catalysts under various conditions. It is shown that reduction of pure hydrogen with high flow rate leads to a sharp temperature rise in the catalyst bed, which results in the sintering of the cobalt particles. A slow temperature rise with dilute hydrogen helps stabilize the cobalt particles, and the cycle treatment of the catalyst using TPO–TPR without steam induction has little effect on the size of cobalt particles. When steam is included in the reduction stream with hydrogen the TPR–TPO cycle treatment can help increase the Co dispersion, which increases the catalyst activity and selectivity to C5+.