Selective catalytic reduction (SCR) of NO with CH4 was studied over ZSM5-based cobalt and palladium catalysts in the presence of oxygen and water. Pore volume impregnation of cobalt was found to be more efficient and much simpler than the common (wet) ion-exchange method. In the case of Pd, wet ion-exchange was found to give superior activity. As compared to alternative catalytic systems reported in literature for CH4-SCR in the presence of water, ZSM5-supported Co-Pd combination catalysts are very active and selective. The activity of the ZSM5-based Co-Pd combination catalysts, however, decreases strongly with time-on-stream. Strikingly, this deactivation is not (predominantly) caused by steam dealumination of the zeolites: loss of SCR activity with time-on-stream occurs irrespective of the presence or absence of water in the feed. The higher the temperature of calcination the lower the initial activity and the faster the deactivation. In addition to this, the deactivation is also more pronounced at higher reaction temperatures. These observations are consistent with a temperature-induced mechanism of ion migration and sintering as also confirmed by TPR analysis. The role of water in this migration process is not obvious. Hence, the limited thermal stability of ZSM5-supported metal (ion) catalysts leads to two demands, which have yet to be made for application of zeolites in CH4-SCR: (1) stabilisation of the ionic phases in zeolite pores of different geometry; and (2) further improved activity and selectivity allowing one to operate at temperatures that do not exceed 350-400degreesC, where deactivation is not significant.