Ag/MCM-41 catalyst is prepared by impregnation technique and characterized by low-temperature N-2 sorption, XRD, TPR and TEM methods. The ordered structure of mesoporous silicate MCM-41 is used as a nanoreactor to synthesize and stabilize small Ag nanoparticles. Two types of Ag particles are shown to form in Ag/MCM-41 catalyst: ultrasmall (< 3 nm) inside pores of support and large (4-8 nm) on the external surface of the MCM-41. Catalytic tests in oxidation mixture containing 1% CO and 1% propylene show that Ag/MCM-41 catalyst can be used for selective oxidation of CO in the presence of propylene from 91 degrees C (CO conversion > 98%) to 217 degrees C (conversion of propylene < 5%). The catalyst can be used for purification of hydrocarbons from CO by selective oxidation of second.