The synthesis of ceria nanoparticles using an inverse microemulsion technique and precipitation method was investigated. Ceria nanoparticles were synthesized by adding diluted ammonia to a microemulsion consisting of n-heptane, Marlophen NP5 and cerium nitrate. The micelle and particle size were adjustable in the range of 5-12nm by varying the molar ratio of water to surfactant and analyzed by dynamic light scattering (DLS), small angle X-ray scattering (SAXS) and high-resolution transmission electron microscopy (HRTEM). After isolation through precipitation, the nanoparticles were subsequently treated at 100-600 °C. The catalytic activity of particles annealed at 400 and 600 °C were tested in soot combustion reactions and characterized by temperature-programmed oxidation (TPO) indicating a size-dependant activity. To prevent the nanoparticles from aggregation, the microemulsion technique was adopted to integrate the nanoparticles homogeneously into a mesoporous SiC matrix through the use of a preceramic polymer. The obtained composite material was also tested in soot combustion reactions.