The state and local environment of gallium species in Ga/H-ZSM-5 zeolites prepared by ion-exchange have been identified by various techniques. Small GaO(OH) particles (diameter similar to4-5 nm) were present after synthesis at the outer surface of the zeolite crystals together with some isolated large particles (needles 0.5-1. mum long and 0.1-0.2 mum wide) of Ga2O3. Upon calcination at 823 K both were transformed into small Ga2O3 particles (diameter similar to4-5 nm), still at the outer surface of the zeolite crystals, while the needles disappeared almost completely. Reducing-oxidising cycles at 823 K enable the migration of these gallium species into the zeolite, most likely as ion-exchanged Ga species. The latter enhance the bifunctional (dehydrogenating and acidic) catalytic properties of the Ga-modified zeolite for the aromatisation of propane and it appears that maintaining those in the Gal oxidation state may enhance the aromatic yield. (C) 2003 Elsevier Science B.V. All rights reserved.