In this study, ceria-zirconia based catalysts (CeO2, ZrO2 and Ce0.5Zr0.5O2) were synthesized by hydrothermal method and characterized by N2-sorption, X-ray diffraction (XRD), scanning electron microscopy (SEM) and transmission electron microscopy (TEM). Acidity and basicity of synthesized catalysts were investigated by NH3 and CO2 temperature-programmed desorption (TPD). Brunauer-Emmett-Teller (BET) surface area of CeO2, Ce0.5Zr0.5O2 and ZrO2 were found to be 88, 117 and 70 m2 g−1 and average crystallite sizes was 9.48, 7.09 and 9.45 nm, respectively. These catalysts were further used for direct conversion of CO2 with methanol for the synthesis of dimethyl carbonate (DMC). DMC yield was found to be highly dependent upon the both basicity and acidity of catalysts. Ce0.5Zr0.5O2 catalysts showed better activity as compared to CeO2 and ZrO2 catalysts. Effect of reaction conditions (such as catalyst dose, reaction temperature and reaction time) and catalyst reusability was studied with Ce0.5Zr0.5O2 catalyst. The optimum operating condition for direct conversion of CO2 into DMC at constant pressure of 150 bar were found to be reaction time = 24 h, catalyst dose = 1.25 g and temperature = 120 °C. Moreover, chemical equilibrium modeling was performed using Peng–Robinson–Stryjek–Vera equation of state (PRSV-EoS) along with the van der Waals one-fluid (1PVDW) mixing rule to calculate the heat of reaction and Gibbs free energy change.