Cerium oxide (CeO2) nanoparticles were prepared sonochemically, by using cerium nitrate and azodicarbonamide as starting materials, and ethylenediamine or tetraalkylammonium hydroxide as additives. The additives have a strong effect on the particle size and particle size distribution. CeO2 nanoparticles with small particle size and narrow particle size distribution are obtained with the addition of additives; while highly agglomerated CeO2 nanoparticles are obtained in the absence of additives. Monodispersed CeO2 nanoparticles with a mean particle size of ca. 3.3 nm are obtained when tetramethylammonium hydroxide (TMAOH) is used as the additive and the molar ratio of cerium nitrate/azodicarbonamine/TMAOH is 1/1/1. Blue shifts of the absorption peak and the absorption edges of the products are observed in the UV-Vis absorption spectra as a result of the quantum size effect. The samples have been characterized using powder XRD, TEM, DLS, and absorption Spectra.