Cerium oxide (CeO2), one of the most significant rare-earth oxides, has attracted considerable interest over the past decades. This is primarily due to the ease in Ce3+/Ce4+ redox ability as well as other factors that affect the efficacy of CeO2 and CeO2-based materials. CeO2 and CeO2-based materials have shown enhanced responses in catalytic and photocatalytic activities for environmental and biological applications. In addition, the formation of Ce3+ and oxygen vacancies in CeO2 has aided in enhancing CeO2 activities. In order to produce oxygen-deficient CeO2 and CeO2-based materials, a variety of synthesis methods were used and are highlighted in this review. Therefore, this review compiles and discusses the mechanisms that involve oxygen vacancies, defects, and Ce3+ formation for environmental applications, such as photocatalytic dye degradation, photocatalytic CO2 reduction, and non-colored pollutants removal. The biological applications of CeO2, such as antioxidant enzyme mimetic, antioxidant reactive oxygen species/reactive nitrogen species, and antimicrobial activities, are also discussed. Additionally, future prospects are also suggested for future development and detailed investigations.