Acetylene coupling to benzene on the Pd(lll) surface is greatly enhanced by the presence of catalytically inert Au atoms. LEED and Auger spectroscopy show that progressive annealing of Au overlayers on Pd(lll) leads to the formation of a series of random surface alloys with continuously varying composition. Cyclization activity is a strong function of surface composition-the most efficient catalyst corresponds to a surface of composition similar to 85% Pd. CO TPD and HREELS data show that acetylene cyclization activity is not correlated with the availability of singleton Pd atoms, nor just with the presence of 3-fold pure Pd sites-the preferred chemisorption site for C2H2 on Pd{111}. The data can be quantitatively rationalized in terms of a simple model in which catalytic activity is dominated by Pd6Au and Pd-7 surface ensembles, allowance being made for the known degree to which pure Pd{111} decomposes the reactant and product molecules.