Bismuth was added to a SiO2-supported palladium catalyst to improve its catalytic properties In the oxidative conversion of lactose to lactobionic acid. The bimetallic systems containing small amounts of BI (1-3% by wt.) showed a high activity and a very good selectivity in the reaction. Formation of intermetallic BiPd and Bi2Pd type compounds (resulting from an Interaction between Pd and BI) was observed in the system by the XRD and ToF-SIMS studies. In the case of bimetallic systems containing a small amount of Bi, only BiPd type intermetallic compound was found. The presence of the compounds was probably the reason of increase in the activity and selectivity of Pd-Bi/SiO2 catalysts.