A highly active and stable catalyst for hydrogen-iodide decomposition reaction in sulfur-iodine (SI) cycle has been prepared in the form of Pd–CeO2nanocatalyst by sol-gel method with different calcination temperatures (300 °C, 500 °C, and 700 °C). XRD and TEM confirmed a size around 6–8 nm for Pd–CeO2particles calcined at 300 °C. Raman study revealed large number oxygen vacancies in Pd–CeO2-300 when compared to Pd–CeO2-500 and Pd–CeO2-700. With increase in calcination temperature, the average particle size increased whereas the specific surface area and number of oxygen vacancies decreased. Hydrogen-iodide catalytic-decomposition was carried out in the temperature range of 400°C–550 °C in a quartz-tube, vertical, fixed-bed reactor with 55 wt % aqueous hydrogen-iodide feed over Pd–CeO2catalyst using nitrogen as a carrier gas. Pd–CeO2-300 showed hydrogen-iodide conversion of 23.3%, which is close to the theoretical equilibrium conversion of 24%, at 550 °C. It also showed a reasonable stability with a time-on-stream of 5 h.