Noble-metal-supported metal oxides (e.g., Au/CeO₂, Pd/Al₂O₃, etc.) are popular as efficient catalysts for many important catalytic reactions, while their high price and easy deactivation restrict their broad application. Herein, we initiate a double substitution methodology to acquire catalysts with merits of excellent catalytic activity, high stability, and relatively low cost. For this purpose, a Au/CeO₂ catalyst was used as reference, and the noble metal Au was completely replaced by the cheaper Ag, meanwhile the rare earth ion, Ce⁴⁺ of the CeO₂ support was partially substituted by the transition metal ion, Fe³⁺. This inversely supported catalyst, Ce_0.9Fe_0.1O_1.97/Ag, was prepared by a two-step method based on co-precipitation and a subsequent liquid-phase reduction. Systematic characterizations demonstrate that Ag nanoparticles with a diameter of around 50 nm were wrapped by Ce_0.9Fe_0.1O_1.97 layers. Between the Ag nanoparticles and Ce_0.9Fe_0.1O_1.97 layer, there existed a strong interaction. When this sample was tested as a catalyst for CO oxidation, a full conversion temperature of 150 °C was achieved at a space velocity of 24 000 ml h⁻¹ g⁻¹_cat, showing a catalytic activity comparable to that previously reported in the literature on the known catalyst Au@CeO₂ measured at a lower space velocity of 15 000 ml h⁻¹ g⁻¹_cat. More strikingly, this catalyst showed a superb catalytic stability and enhanced oxygen storage capacity. The introduction of smaller Fe³⁺ into the CeO₂ lattice and the strong interactions between Ag and Ce_0.9Fe_0.1O_1.97 strongly improved the stability and catalytic performance.