We report a novel Au-Ag alloy catalyst supported on mesoporous aluminosilicate Au-Ag@MCM prepared by a one-pot synthesis procedure, which is very active for low-temperature CO oxidation. The activity was highly dependent on the hydrogen pretreatment conditions. Reduction at 550-650 degrees C led to high activity at room temperature, whereas as-synthesized or calcined samples did not show any activity at the same temperature. Using various characterization techniques, such as XRD, UV-vis, XPS, and EXAFS, we elucidated the structure and surface composition change during calcination and the reduction process. The XRD patterns show that particle size increased only during the calcination process on those Ag-containing samples. XPS and EXAFS data demonstrate that calcination led to complete phase segregation of the Au-Ag alloy and the catalyst surface is greatly enriched with AgBr after the calcination process. However, subsequent reduction treatment removed Br- completely and the Au-Ag alloy was formed again. The surface composition of the reduced Au-Ag@MCM (nominal Au/Ag = 3/1) was more enriched with Ag, with the surface Au/Ag ratio being 0.75. ESR spectra show that superoxides are formed on the surface of the catalyst and its intensity change correlates well with the trend of catalytic activity. A DFT calculation shows that CO and O2 coadsorption on neighboring sites on the Au-Ag alloy was stronger than that on either Au or Ag. The strong synergism in the coadsorption of CO and O2 on the Au-Ag nanoparticle can thus explain the observed synergetic effect in catalysis.