Vehicles that run on natural gas must be equipped with an exhaust gas after-treatment system to burn their unavoidable CH4 slip, which must not be released into the environment as CH4 is a potent greenhouse gas. Pd is known as a highly active catalyst material for CH4 oxidation. For this study, Pd was deposited on a gamma-Al2O3 support and the as-received samples were pre-reduced and pre-oxidized, respectively. Near-Ambient Pressure Photoelectron Spectroscopy and the Temporal Analysis of Products methodology were combined to understand that both electronic states, namely PdO and Pd degrees, are active for the CH4 oxidation reaction, whereby the superior activity of the pre-reduced Pd/gamma-Al2O3 catalyst was ascribed to the spill-over of OH-groups from the support to Pd. It was found that the reaction products, CO, CO2 and H-2, were strongly and, to a large extent, adsorbed on the catalyst surface and were involved in reversible chemical interactions on the catalyst surface during the CH4 oxidation reaction on the Pd/gamma-Al2O3 catalyst.