CuO-CeO2 nanocatalysts with varying CuO contents (1, 5, 9, 14 and 17 wt %) were prepared by one-step flame spray pyrolysis (FSP) and applied to CO oxidation. The influences of CuO content on the as-prepared catalysts were systematically characterized by X-ray diffraction (XRD), N2 adsorption-desorption at −196 °C, field emission scanning electron microscopy (FESEM), high-resolution transmission electron microscopy (HRTEM), Raman spectroscopy, X-ray photoelectron spectroscopy (XPS), and hydrogen-temperature programmed reduction (H2-TPR). A superior CO oxidation activity was observed for the 14 wt % CuO-CeO2 catalyst, with 90% CO conversion at 98 °C at space velocity (60,000 mL × g−1 × h−1), which was attributed to abundant surface defects (lattice distortion, Ce3+, and oxygen vacancies) and high reducibility supported by strong synergistic interaction. In addition, the catalyst also displayed excellent stability and resistance to water vapor. Significantly, in situ diffuse reflectance infrared Fourier transform spectroscopy (in situ DRIFTS) showed that in the CO catalytic oxidation process, the strong synergistic interaction led readily to dehydroxylation and CO adsorption on Cu+ at low temperature. Furthermore, in the feed of water vapor, although there was an adverse effect on the access of CO adsorption, there was also a positive effect on the formation of fewer carbon intermediates. All these results showed the potential of highly active and water vapor-resistive CuO-CeO2 catalysts prepared by FSP.