It is well-known that water has a detrimental effect on the low-temperature methane combustion activity of palladium catalysts. However, when the transient activity (i.e., light-off or ignition-extinction experiments) of methane combustion catalysts is compared, the effects of water adsorption-desorption phenomena are seldom directly considered. While these effects are important to keep in mind when studying support-dependent methane combustion activity, they are crucial when selecting a catalyst diluent. In many cases, the water adsorption-desorption properties of "inert" reactor diluents may dominate the transient methane combustion activity of a Pd catalyst. In this contribution, we show how different catalyst pretreatments on various Pd catalysts can influence the presence of water and hydroxyl groups on the o surface of catalyst supports, reactor diluents, and active phase, and how this process dramatically affects observed methane combustion activity. Transiently, alumina (both support and diluent), which strongly binds water that is produced in the reaction, can keep the PdO phase active and water-free. However, after alumina surfaces become saturated with water, the PdO surface also becomes hydroxylated, which decreases the catalyst's methane combustion activity. Due to this time-dependent surface titration, care must be taken when comparing transient experiments between catalysts on different supports; comparable data for methane combustion must be collected while carefully checking for water adsorption on the surface of the catalyst and diluent. Finally, we propose that a channel for sustainable high combustion rates is possible if water is prevented from adsorbing on the highly active PdO surfaces.