Ceria is widely used as a catalyst for soot combustion, but effects of Zr substitution on the reaction mechanism is ambiguous. The present work elucidates effects of Zr substitution on soot combustion over cubic fluorite-structured nanoceria. The nanostructured CeO2, Ce0.92Zr0.08O2, and Ce0.84Zr0.16O2 composed of 5–6 nm crystallites display Tm-CO2 (the temperature at maximum CO2 yield) at 383, 355, and 375°C under 10 vol.% O2/N2, respectively. The size of agglomerate decreases from 165.5 to 51.9–57.3 nm, which is beneficial for the soot-ceria contact. Moreover, Zr increases the amount of surface oxygen vacancies, generating more active oxygen (O2− and O−) for soot oxidation. Thus, the activities of Ce0.92Zr0.08O2 and Ce0.84Zr0.16O2 in soot combustion are better than that of CeO2. Although oxygen vacancies promote the migration of lattice O2−, the enriched surface Zr also inhibits the mobility of lattice O2−. Therefore, the Tm-CO2 of Ce0.84Zr0.16O2 is higher than that of Ce0.92Zr0.08O2. Based on reaction kinetic study, soot in direct contact with ceria preferentially decomposes with low activation energy, while the oxidation of isolated soot occurs through diffusion with high activation energy. The obtained findings provide new understanding on the soot combustion over nanoceria.