Nanosize effect of ZrO2 in Au/ZrO2 catalyst was studied by deposition-precipitation of Au nanoparticles in similar sizes (4-5 nm) on ZrO2 nanoparticles of varying sizes. The catalysts were characterized with XRD, TEM, XPS, and nitrogen adsorption to understand the effect of ZrO2 particle size on the catalytic nanostructures. Nanocomposite Au/ZrO2 catalysts consisting of comparably sized Au-metal (4-5 nm) and ZrO2 (5-15 nm) nanoparticles are found advantageous over those containing similarly sized Au-metal but larger ZrO2 (40-200 nm) particles for CO oxidation. This finding may have important implications on the designed preparation of advanced nanostructured catalysts and other chemical materials.