Cerium oxide (CeO2) has attracted much attention in recent years because of its unique physiochemical properties in photocatalysis. Herein, pure CeO2 and Sn-doped CeO2 (Sn–CO) nanoparticles were synthesized by a simple hydrothermal method. In addition, the Sn-doped CeO2 sample was composited with Ag nanoparticles by a chemical precipitation method to prepare Ag/Sn–CO nanocomposite. The prepared samples were characterized by X-ray diffraction (XRD), field emission scanning electron microscopy (FESEM), energy dispersive X-ray spectroscopy (EDS) and UV-visible absorption spectroscopy. Furthermore, the photocatalytic activity of the as-prepared cerium oxide-based samples was evaluated using the degradation of methyl orange (MO) under ultraviolet and visible light irradiation. It was found that photocatalytic activity of the pure CeO2 nanoparticles was enhanced through Sn doping and surface sensitization with Ag. The enhanced photocatalytic performance of the Sn-doped CeO2 sample can be ascribed mainly to a decrease in its band gap energy. Moreover, the improved photocatalytic activity of the Ag/Sn–CO nanocomposite compared to that of the Sn–CO sample is due to its localized surface plasmon resonance (LSPR) effect. The Ag/Sn–CO sample exhibited an efficient photocatalytic characteristic for degrading MO under visible light irradiation with a high degradation rate of 99% after 45 min. The responsible mechanism for the enhancement of photocatalytic activity of cerium oxide was discussed.