A green, rapid and continuous hydrothermal flow synthesis (CHFS) route has been used to produce highly stable and active novel ceria–zirconia oxide/graphene nanocomposite catalyst [Ce–Zr oxide/graphene, where nominal atomic ratio of Ce:Zr (1:1)]. This catalyst has been investigated for the direct synthesis of dimethyl carbonate (DMC) from methanol (MeOH) and carbon dioxide (CO2) using 1,1,1, trimethoxymethane (TMM) as a dehydrating agent in a high pressure reactor. The resulting graphene nanocomposites have been further subjected to heat treatment at 973 K for four hours in nitrogen. The as-prepared and the corresponding heat treated catalysts have been extensively characterized using powder X-ray diffraction (XRD), transmission electron microscopy (TEM), Brunauer–Emmett–Teller (BET) surface area measurement and X-ray photoelectron spectroscopy (XPS) analysis. The effect of various reaction conditions, such as reaction temperature, CO2 pressure, catalyst loading and reaction time has been extensively evaluated. The optimum condition for the direct synthesis of DMC has been found at 383 K, 275 bar and 10% (w/w) catalyst loading. The ceria–zirconia oxide (Ce–Zr oxide)/graphene nanocomposite catalyst showed highest MeOH conversion of 58% at a DMC yield of 33%. Catalyst reusability studies have been conducted at optimum reaction condition and it has been found that this catalyst could be reused several times without losing its catalytic activity. These experimental findings indicated that novel ceria–zirconia oxide/graphene nanocomposite has a huge potential as a heterogeneous catalyst for the synthesis of DMC. The results also confirmed that the use of TMM markedly improved the conversion of MeOH and the yield of DMC.