Titania-supported Pd catalysts prepared by the modified sol-gel method are effective NO reduction catalysts with CH4 in the presence of oxygen and water. However, they were found to partially deactivate in the presence of SO2. The effect of SO2 on NO adsorption sites was investigated using in situ diffuse reflectance infrared Fourier transform spectroscopy and temperature-programmed desorption. The reversible NO adsorption capacity of the catalyst was significantly reduced following SO2 exposure. SO2 was also seen to inhibit the formation of linear Pd-NO species on the surface. It is suggested that partial loss of NO reduction activity could be related to the inhibition of the Pd-NO formation. Addition of Gd is found to partially prevent or slow down the deactivation process. (C) 2003 Elsevier Science (USA). All rights reserved.