Rhodium particles supported on zirconia doped with neodymium oxide show an oscillating behavior in N2O decomposition in the presence of oxygen and water but the oscillating behavior occurs only when the zirconia surface is hydrated. The phenomenon is ascribed to a dynamic process of surface accumulation of atomic oxygen (produced by N2O dissociation) on the Rh surface and reconstruction of these supported Rh particles above a level of oxygen coverage, with a rapid drop in the activity and release of gaseous dioxygen. This in situ reconstruction of Rh particles, however, may occur only on a hydrated surface.