Incomplete mineralization and high outlet ozone concentration are two urgent issues that need to be overcome in plasma catalytic systems for the purification of volatile organic compounds (VOCs). Herein, we attempted to address these issues by coupling Ag/ZSM-5 catalyst reduced by hydrogen at different temperatures with a dielectric barrier discharge (DBD) reactor during toluene degradation. The catalyst characterization (including XRD, UV–vis, XPS, XAFS, Raman, EPR) combined with density functional theory (DFT) calculations indicated that hydrogen reduction lowered the energy between metal ions and oxygen, generating more oxygen vacancies and facilitating the transition from Ag ions to Ag0. The abundant vacancies influenced the electron properties in the adjacent atoms, making them catalytically active and thereby promoting the adsorption and activation of CO and O3. Thus, the mineralization rate and O3 decomposition performance were significantly enhanced for the hydrogen-reduced Ag/ZSM-5 catalysts. Moreover, the L-H, E-R and MVK mechanisms were first experimentally verified in plasma catalytic system by changing the background atmosphere during toluene adsorption and discharge degradation stages. This study provides insights into the rational design of highly effective catalysts in a plasma catalytic system for the removal of VOCs.