The selective reduction of NO by methane on Pd-ZSM-5 catalysts with different Si/Al and Pd loadings was examined in the presence and absence of water vapor. At low Si/Al, NO reduction activity was high and stable, while at higher Si/Al, activity was lower and deactivation was significant. The deactivated samples showed PdO bands in the Raman spectra, which indicated that dispersed Pd cations play a key role in NO reduction. The influence of Si/Al on the stability of dispersed Pd cations suggested the importance of Al site pairs for the stable dispersion of Pd cations. (C) 2000 Elsevier Science B.V. All rights reserved.