The M1 phase of MoVNbTeOx mixed metal oxide is one of the most attractive catalysts for the oxidative dehydrogenation of ethane (ODHE). This work presents the performance of pure-phase M1/CeO2 nanocomposite catalysts in the ODHE process. Nanosized CeO2 is successfully added to pure-phase M1 catalysts by physical mixing and by a sol–gel method, so that M1/CeO2 nanocomposites with different CeO2 particle sizes are formed. The experimental results show that the introduction of CeO2 can increase the abundance of V5+ on the catalyst surface by a self-redox solid-state reaction during activation at 400 °C in air. Improvement of catalyst performance can be observed with the decrease of CeO2 dimensions. The nanocomposite catalyst consisting of M1 particles and 4.4 nm CeO2 exhibits the best catalyst productivity of 0.66 kgC2H4kgC2H4/kgcat h with 20% lower cost than for pure-phase M1 catalysts at 400 °C. It is anticipated that a high-throughput and low-cost ODHE process could be realized on M1/CeO2 nanocomposites.