A series of palladium-substituted La2CuO4, corresponding to the formula La2C1-xPdxO4 (x = 0-0.2) were prepared by metal nitrate decomposition in a polyacrylamide gel. This method allows an easy incorporation of palladium in the mixed-oxides, which are formed at moderate temperature with rather high specific areas (13-17 m(2)/g). The partial substitution of copper for palladium allows a strong improvement of the three-way catalytic activity, in particular for NO reduction. The light-off temperatures for the conversions of CO, NO and C3H6 decreased markedly when increasing the palladium content, the activity of catalysts La2Cu0.9Pd0.1O4 and La2Cu0.8Pd0.2O4 being comparable to that of a Pt-Rh/CeO2-Al2O3 catalyst for NO reduction, and higher for CO and C3H6 oxidation. All the La2Cu1-xPdxO4 catalysts are activated under reacting conditions. This activation corresponds to the destruction of the mixed-oxide structure, with formation of reduced Pd-0 ions atomically dispersed, surrounded by Cu+ and Cu2+ species on a lanthanum oxycarbonate matrix. This high dispersion state of the two transition metals in various oxidation states is supposed to originate from the initial La2Cu1-xPdxO4 structure.