Utilizing a combination of molecular beam techniques and scanning tunneling microscopy (STM) under ultrahigh vacuum (UHV) conditions we have studied the interaction of oxygen with an alumina-supported Pd model catalyst as well as the influence of the oxygen pretreatment on the kinetics of the CO oxidation reaction. The Pd particles were deposited by metal evaporation in UHV onto a well-ordered alumina film prepared on a NiAl(110) single crystal. The particle density, morphology and structure are determined by STM both immediately after preparation and after oxygen adsorption and CO oxidation. The oxygen sticking coefficient and uptake in the temperature regime between 100 and 500 K and the kinetics of the CO oxidation reaction are quantitatively probed by molecular beam techniques. It is found that starting at temperatures below 300 K the Pd particles rapidly incorporate large amounts of oxygen, finally reaching stoichiometries of PdO>0.5. STM shows, that neither the overall particle shape nor the dispersion is affected by the oxygen and CO treatment. Only after saturation of the bulk oxygen reservoir are stable CO oxidation conditions obtained. In the low-temperature regime (<500 K), only the surface oxygen, but not the bulk and subsurface oxygen is susceptible to the CO oxidation. The activation energies for the Langmuir-Hinshelwood step of the CO oxidation reaction were determined both in the regime of high CO coverage and high surface oxygen coverage. A comparison shows that the values are consistent with previous Pd(111) single crystal results. Thus, we conclude that, at least for the particle size under consideration in this study (5.5 nm), the LH activation energies are neither affected by the reduced size nor by the oxygen pretreatment.