Pure and Ce-modified ZnO nanosheet-like polycrystalline samples were successfully synthesized by a simple and fast microwave-based process and tested as photocatalytic materials in environmental remediation processes. In an attempt to clarify the actual relationships between functionality and atomic scale structure, an in-depth characterization study of these materials using a battery of complementary techniques was performed. X-ray diffraction (XRD), field emission-scanning electron microscopy (FE-SEM), high-resolution transmission electron microscopy (HRTEM), high-angle annular dark field-scanning transmission electron microscopy (HAADF-STEM), energy-dispersive X-Ray spectroscopy-scanning transmission electron microscopy (STEM-XEDS), photoluminescence spectroscopy (PL) and UV–Visible absorption spectroscopy were used to evaluate the effect of Ce ions on the structural, morphological, optical and photocatalytic properties of the prepared ZnO nanostructures. The XRD results showed that the obtained photocatalysts were composed of hexagonal, wurtzite type crystallites in the 34–44 nm size range. The SEM and TEM showed nanosheet-shaped crystallites, a significant fraction of them in contact with bundles of randomly oriented and much smaller nanoparticles of a mixed cerium–zinc phase with a composition close to Ce0.68Zn0.32Ox. Importantly, in clear contrast to the prevailing proposals regarding this type of materials, the STEM-XEDS characterization of the photocatalyst samples revealed that Ce did not incorporate into the ZnO crystal lattice as a dopant but that a heterojunction formed between the ZnO nanosheets and the Ce–Zn mixed oxide phase nanoparticles instead. These two relevant compositional features could in fact be established thanks to the particular morphology obtained by the use of the microwave-assisted hydrothermal synthesis. The optical study revealed that in the ZnO:Ce samples optical band gap was found to decrease to 3.17 eV in the samples with the highest Ce content. It was also found that the ZnO:Ce (2 at.%) sample exhibited the highest photocatalytic activity for the degradation of methylene blue (MB), when compared to both the pure ZnO and commercial TiO2-P25 under simulated sunlight irradiation. The kinetics of MB photodegradation in the presence of the different photocatalysts could be properly described using a Langmuir–Hinshelwood (LH) model, for which the ZnO:Ce (2 at.%) sample exhibited the highest value of effective kinetic constant.