A nanometric Rh overlayer on a Fe - Cr - Al metal foil prepared by pulsed arc-plasma deposition showed simultaneous removal of NO, CO and C3H6 in a simulated three-way catalyst reaction under stoichiometric conditions, whereas the conversions of NO and C3H6 decreased under lean conditions. The decrease of C3H6 conversion despite of excess O2 was caused by the preferential adsorption of O2 on the surface of Rh overlayer, inhibiting C3H6 adsorption and oxidation. Very small amount of Pt deposited on Rh overlayer can act as adsorption sites of C3H6, and the activity of Rh overlayer for C3H6 oxidation under lean conditions was successfully improved.