The mixed perovskite type oxides with nominal formula LaTi0.5Mg0.5-xPdxO3, (0 ≤ x ≤ 0.10) were prepared by anneling the ethanol solution of precursor in nitrogen flow at 1200 ° C. X-ray powder diffraction (XRPD) analysis shows that the orthorhombic perovskite structure was found in all investigated samples. However, at least a part of palladium is not incorporated into perovskite structure and remains as separate phase, which is reduced to Pd-0 at 1200 ° C. X-ray photoelectron spectroscopy (XPS) reveled the presence of Pd2+, which indicate a reoxidation of Pd-0 in the surface layers during cooling. The Pd content in the samples has a small influence on the methane oxidation activity below the temperature of 500 ° C. At temperatures higher than 500 C, the methane oxidation activity of the sample with x = 0.05 exceeds the activity of the sample with x = 0.10. The sharp increase of methane oxidation activity over the sample with lower content of palladium at about 500 ° C was ascribed to the higher dispersion of PdO and Pd-0 phases. Thus, the higher contribution of lattice oxygen and possible local change in oxidation state of palladium can be a reason for the enhanced activity. Contrary to the supported Pd/Al2O3 catalyst, the incorporation of palladium into perovskite matrix and interaction of PdO-Pd-0 benefits the activity of smaller particles at higher reaction temperatures. © 2004 Elsevier B.V.. All rights reserved.