The search for active catalysts that efficiently oxidize methane under ambient conditions remains a challenging task for both C1 utilization and atmospheric cleansing. Here, we show that when the particle size of zinc oxide is reduced down to the nanoscale, it exhibits high activity for methane oxidation under simulated sunlight illumination, and nano silver decoration further enhances the photo-activity via the surface plasmon resonance. The high quantum yield of 8% at wavelengths < 400 nm and over 0.1% at wavelengths ¿ 470 nm achieved on the silver decorated zinc oxide nanostructures shows great promise for atmospheric methane oxidation. Moreover, the nano-particulate composites can efficiently photo-oxidize other small molecular hydrocarbons such as ethane, propane and ethylene, and in particular, can dehydrogenize methane to generate ethane, ethylene and so on. On the basis of the experimental results, a two-step photocatalytic reaction process is suggested to account for the methane photo-oxidation.