EXAFS and XRD, the latter in the advanced mode of Debye function analysis (DFA), were combined to investigate the effect of preparation conditions on the size of Pd clusters inside the cavities of zeolite Y, It is concluded that the macroscopic size and extent of compactness of the sample exert a strong effect on-the ultimate dispersion of the metal inside the zeolite. The rates of effective pore diffusion during the calcination of the ion-exchanged sample in a flow of oxygen are critical. Crucial is the composition of the local atmosphere, inside the zeolite cavities, at the stage when the ammine ligands of the Pd(NH3)(4)(2+) decompose. If mixing of the external, oxygen-rich atmosphere with the local reducing atmosphere is insufficient, "autoreduction" of Pd ions to Pd-0 takes place, and the primary clusters tend to agglomerate to large entities. When all other parameters are kept equal, the extent of mixing between local and external atmosphere will depend on the sample size and its degree of compactness. In the present work prepressed pellets are compared with zeolite powders. As expected, metal agglomeration is more pronounced in the former case, because mixing of the gases is less efficient and the local atmosphere remains reducing, thus favoring autoreduction of the Pd. Earlier findings that exposure to carbon monoxide induces:secondary metal agglomeration are confirmed.