This study presents results for water and SO2 deactivation of unsupported PdO during methane combustion. Results of IR studies on alumina, unsupported PdO, and a 6 wt.% Pd/alumina catalyst are also presented. For methane combustion using Pd supported on alumina, SO2 in dry gas causes both inhibition and deactivation for methane oxidation. Activity studies at 733 and 793 K indicate that activity loss was greater and occurs more rapidly when both water and SO2 are present. For unsupported PdO, exposure to SO2 causes irreversible and rapid deactivation in both dry and wet environments. In situ IR studies demonstrate that for PdO supported on alumina the formation of PdSO4, Al-2(SO4)(3), and surface aluminum sulfate occur more rapidly when both SO2 and water are present. Palladium sulfate is also observed for unsupported PdO, and X-ray diffraction of deactivated catalysts indicates the presence of Pd-0, even though reactions were conducted in excess oxygen. It is proposed that under dry conditions the alumina surface scavenges SO2, slowing the formation of PdSO4. When water is present SO2 is displaced from the alumina surface and spillover of SO2 from PdO to the alumina is inhibited leading to a higher rate of formation of PdSO4. A process whereby sulfation of the PdO particle surface and reduction of the particle core to PdO can occur is proposed.