Nanostructured ceria powder was synthesized by a thermochemical process and investigated its applicability for an oxygen gas sensor. An amorphous precursor powders prepared by spray drying a cerium-nitrate solution were transformed successfully into nanostructured ceria by heat-treatment in air atmosphere. The powders were a loose agglomerated structure with extremely fine particles about 15 nm in size, resulting in a very high specific surface area . The oxygen sensitivity and the response time measured at sintered sample at was about -0.25 and very short, i.e., seconds, respectively.