The composite system of nanostructured gold and cerium oxide, with a. gold loading 5-8 wt%, is reported in this work as a very good catalyst for low-temperature water-gas shift. Activity depends largely on the presence of nanosized ceria particles. Various techniques of preparation of an active catalyst are disscussed. The presence of gold is crucial for activity below 300 degreesC. A dramatic effect of gold on the reducibility of the surface oxygen of ceria is found by H-2-TPR, from 310-480 degreesC to 25-110 degreesC. All of the available surface oxygen was reduced, while there was no effect on the bulk oxygen of ceria. This correlates well with the shift activity of the Au-ceria system.