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A new type composite anode was fabricated to develop direct methanol fuel cell or polymer electrolyte membrane fuel cells. A Pt on nano-sized CeO2 particles which in turn are supported on carbon black (CB) was synthesized in a step wise process. The pure CeO2 was synthesized using an ammonium carbonate precipitation method, and the Pt particles dispersed on the CeO2 in such a way that a uniform dispersion with the CB was obtained (Pt-CeO2/CB). The anode properties (i.e. peak current density and onset potential for methanol oxidation) on our composite anode were better than that on commercially available alloy anode Pt-Ru/Carbon. The peak current density for methanol oxidation on Pt-CeO2 composite anode was 1.9 times higher than that on commercially available Pt-Ru alloy anode. The onset potential of methanol oxidation on Pt-CeO2 composite anode shifted to a lower potential and the activation energy of the Pt-CeO2 composite anode for methanol oxidation reaction was lower than that of the Pt-Ru alloy anode. The high performance and low cost anode material could be obtained using nano size CeO2 particles instead of Ru as rare metal. Importantly, the rare metal, Ru is not required in the present anode material and the amount of Pt required is also significantly reduced. As a consequence, we report a promising candidate Pt-CeO2/CB composite anode for application in the development of direct methanol fuel cells or polymer electrolyte membrane fuel cells.