An extremely stable water dispersion of cerium oxide nanoparticles was prepared by colloidal synthesis, using nitrilotriacetic acid (NTA) as a stabilizer. Based on FT-IR measurements, the surface characteristics of NTA-stabilized ceria nanoparticles are clarified and a fundamental stabilization mechanism is proposed. The mechanism is based on the combination of the ionic nature of cerium oxide surface and the inner-sphere complexation model. From an application perspective it is remarkable that ceria nanoparticle dispersions stabilized by NTA are stable at neutral pH, which makes them a potential successful additive in UV screening applications.