The effect of silicon oxide surface segregation on the locally-resolved kinetics of the CO oxidation reaction on individual grains of a polycrystalline Pd foil was studied in situ by PEEM, MS and XPS. The silicon oxide formation induced by Si-impurity segregation at oxidizing conditions, was monitored by XPS and its impact on the global and local (spatially resolved) kinetics of the CO oxidation was determined by MS and PEEM. The results reveal a drastic inhibiting effect of silicon oxide on the Pd reactivity towards CO oxidation, manifested both in the collapse of the global CO2 formation rate and in the modified local reactive properties of individual Pd micrograins. The presence of adsorbed oxygen on the Pd surface effectively enhances the silicon segregation to the Pd surface.