Precious metals play a key role in efficiently removing the noxious components (NOx, CO and unburned hydrocarbons) in auto exhaust. Not only to achieve a higher conversion efficiency but also to prolong its lifespan, the amount of precious metals being used per unit catalytic converter steadily increased in the last two decades. To lessen the amount of precious metals in the catalysts, the present study is aimed to develop an innovative process in place of conventional catalyst preparation by wet impregnation of metal salts. Nanoparticles were prepared using a pulsed cathodic arc plasma source having Rh, Pt and/or Pt cathodes (10 mm in diameter). The arc pulse with a period of 0.2 ms and current amplitude of 2 kA was generated with a frequency of 2 Hz. The plasma from the cathode entered into a container which contains powders of porous support materials, such as Al₂O₃, CeO₂ or AlPO₄, under mechanical stirring. Precious metals that deposited on the surface of support exhibited a uniform particle size of about 1~2 nm, which was smaller than those prepared by a conventional wet impregnation and subsequent air calcination (>5 nm). Local structural analysis by use of TEM, XPS and EXAFS showed that the occurrence of strong metal-support interaction via bonding (e.g., Pd-O-Ce) at the interface. As a consequence of higher dispersion and stronger interaction, the arc-plasma process achieved more efficient catalytic conversion for CO to CO₂, compared to conventional wet impregnation.