In present study, Ag-CeO2 composites was prepared by reaction synthesis processing. The phases, the procedure of microstructure homogenization, and the microstructure and physical property evolution of the Ag-CeO2 composites via the severe plastic deformation were researched extensively. XRD, SEM and EDS analysis indicate that the Ag-CeO2 composites with tiny AgCeO2 clusters forming in the Ag matrix can be obtained by reactive synthesis processing, and the microstructure shows the tiny CeO2 clusters distribute in the Ag matrix which becomes homogenous and dispersed after cumulative severe plastic deformation. The tensile strength and electrical resistivity decrease with the increase of true strain, while the elongation changes contrarily.