Methanol decomposition on Pd(111) at 300 and 400 K was studied in situ from 5 x 10(-7) to 0.1 mbar by combining vibrational sum frequency generation (SFG) and X-ray photoelectron spectroscopy (XPS). Two competing decomposition pathways, i.e., dehydrogenation of CH3OH to CO and H-2 and methanolic C-O bond scission, were observed by monitoring the time-dependent evolution of CO/CHxO and of carbonaceous deposits CHx (x = 0-3) via their vibrational and photoemission characteristics. Quantification of carbon-containing species was performed by XPS, while the preferred binding site of CHx was determined by SFG using CO as probe molecule for postreaction adsorption. In contrast to previous reports, Pd(111) was found to be quite active for methanolic C-O bond scission. The CH, formation rate strongly increased with pressure and temperature, leading to immediate catalyst deactivation at 0.1 mbar and 400 K. The combined SFG/XPS data suggest that the carbonaceous residues are highly dehydrogenated, such as CH or carbon atoms bonded to hollow sites. Complete dehydrogenation of CHx species and partial dissolution of atomic carbon in the Pd bulk most likely occurred even at 300 K. On the other hand, the CHx species was found to be unexpectedly thermally stable (up to similar to600 K), until carbon dissolution and formation of carbon clusters take place. Regeneration with oxygen above 400 K was able to remove CH, deposits and to partially restore the initial adsorption properties. Corresponding experiments with CO did not produce any carbon signals, indicating that the cleavage of the C-O bond must occur via CHxO intermediates (and not within CO). Methanol decomposition at pressures up to 15 mbar and temperatures up to 550 K, followed by gas chromatography, did not produce measurable decomposition products, due to fast carbon poisoning under catalytic reaction conditions.