We have studied the deposition of Pd on oxygen-precovered Ru(100) at 300 K as a function of both oxygen and Pd coverage. A layered growth of Pd similar to that observed on clean Ru is maintained in the presence of preadsorbed oxygen. This results in complete removal of oxygen from contact with the Ru surface with efficient diffusion to the Pd-vacuum interface. This was confirmed with the complete reactive removal of preadsorbed oxygen by CO at 300 K for theta(Pd) > 6 ML. The out-diffused oxygen overlayer is unusually dense and cannot be made by dissociative chemisorption of O-2 on Pd overlayers on Ru(100). This additional oxygen is desorbed from a new thermal desorption state at 700 K with the remaining oxygen desorbing at 1037 K for theta(Pd) > 2 ML.