A series of mesoporous cerium–iron binary oxides was prepared by a hydrothermal technique using CTAB as a template. The influence of the Fe/Ce ratio and the variations in the preparation techniques such as the type of solvent and the precipitation agent, the approach of the template release, and the temperature of calcination on the phase composition, textural, structural, surface, and redox properties of the obtained materials was studied in details by XRD, nitrogen physisorption, TPR, FTIR, UV–vis, XPS, Raman, and Moessbauer spectroscopies. The materials were tested as catalysts in methanol decomposition and total oxidation of ethyl acetate. It was assumed that the binary materials represented a complex mixture of differently substituted ceria- and hematite-like phases. Critical assessment of their formation on the base of a common mechanism scheme was proposed. This scheme declares the key role of the formation of shared Ce–O–Fe structures by insertion of Fe³⁺ in the ceria lattice and further competitive compensation of the lattice charge balance by the existing in the system ions, which could be controlled by the Fe/Ce ratio and the hydrothermal synthesis procedure used. This mechanism provides proper understanding and regulation of the catalytic behavior of cerium–iron oxide composites in methanol decomposition with a potential for hydrogen production and total oxidation of ethyl acetate as a model of VOCs.