Zinc oxide nanocatalyst was prepared by sol-gel and hydrothermal techniques and silver nanoparticles were added as a reinforcing phase to the zinc oxide matrix. The chemical state required for the catalytic behavior of the nanoparticles was investigated by various methods. The formation of almost spherical AgZnO nanoparticles during the calcination process and the uniform distribution of dark and light regions corresponding to zinc oxide and silver nanocrystals were confirmed by field emission scanning electron microscopy and transmission electron microscopy, respectively. X-ray diffraction patterns confirmed the presence of hexagonal ZnO and FCC silver phases and showed larger crystallite sizes with increasing temperature. Also, the prepared nanoparticles maintained thermal and structural stability up to 420 °C and nitrogen adsorption isotherms showed the highest surface area for nanoparticles calcined at 500 °C. The degradation of organic sulfur-containing material, 2-chloroethylphenyl sulfide (2-CEPS) as a model, was carried out in the presence of AgZnO nanoparticles. The amounts of nanoparticles, temperature and time were optimized as 0.05 g, 55 °C and 12 h, respectively. This study highlights the potential of using AgZnO nanocatalysts in the effective removal of organic sulfur-containing pollutants.