The gold−zirconia yolk−shell system is an interesting catalyst for CO oxidation. The size distribution of the gold nanoparticles is very narrow, and they are well separated from each other also after treatment at high temperature, which is due to their encapsulation in crystalline zirconia hollow spheres. Because this allows thermal and chemical treatment without affecting the size distribution, different defect structures of the gold nanoparticles can be induced, and the effect on catalytic activity can be investigated. Line profile analysis of the powder diffraction data based on the whole powder pattern modeling approach was used to determine the domain size distribution and lattice defects present in this two-phase system. The influence of different diffractometer setups on the results of the line profile analysis was also investigated. Variation of the chemical and thermal treatment procedures allowed altering the microstructure of the system. The resulting catalysts showed substantial variation in the activity for CO oxidation. Lower dislocation densities and less stacking faults result in decreased catalytic activity. These contributions to activity could be studied without any superimposed size effect due to the constant gold particle sizes.