Pd/SZ catalysts prepared by a sol-gel technique were investigated with regards to their NO(2) selective catalytic reduction activity for application in a novel integrated NO-CO-hydrocarbon oxidation and NO selective catalytic reduction system for aftertreatment of lean-burn natural gas reciprocating engine exhaust. The dual-catalyst system consists of a mechanical mixture of a non-noble-metal based oxidation catalyst component (Co/ZrO(2)) for elimination of carbon monoxide and unburned hydrocarbons and oxidation of NO to NO2 and a reduction catalyst component (Pd/SZ) for selective catalytic reduction (SCR) of NO(2) with CH(4). The effect of sol-gel preparation parameters on the activity of Pd/SZ was investigated. The zirconium alkoxide concentration was varied between 0.3 M and 1.3 M during preparation of the Pd/SZ series of catalysts while other sol-gel parameters, such as hydrolysis and zirconium-to-sulfur precursor ratios and palladium loadings were kept constant. Pd/SZ prepared with the lowest concentration of alkoxide was mainly composed of metastable tetragonal zirconia while increasing alkoxide concentration resulted in decreased stability of t-ZrO(2) as evidenced by formation of m-ZrO(2) domains. Crystal phase of ZrO(2) was observed to have a significant effect on Pd dispersion. Palladium dispersion increased with increasing concentration of the monoclinic phase. The best performing Pd/SZ catalyst was further tested as the NO reduction catalyst component for simulated lean exhaust treatment over the dual-catalyst scheme where, N(2) yields in excess of 90% along with significant conversions of CO, CH(4), C(2)H(6) and C(3)H(8) were achieved at 450 degrees C. The NO(x) reduction activity of Pd/SZ was significantly inhibited in the presence of water vapor. The presence of oxidation catalyst in close proximity to the reduction catalyst was shown to act to offset the effect of water vapor. Above 70% N(2) yield was achieved at 450 degrees C in the presence of 7% water vapor during simulated lean exhaust treatment over the dual-catalyst system. (C) 2010 Elsevier B.V. All rights reserved.