Palladium and gadolinium-palladium catalysts supported on titania were studied for the catalytic reduction of NO by CH4. In situ diffuse reflectance infrared Fourier transform spectroscopy (DRIFTS) was used to identify adsorbed species under NO, NO + CH4, and NO + CH4 + O-2 flows. NO adsorption resulted in formation of various nitrogen-oxo adspecies such as bridged/bidentate nitrate, monodentate nitrate, nitro, and linear NO. The thermal stability of these species is examined and related to the NO desorption features observed in temperature-programmed -desorption profiles. Even at room temperature, CH4 was found to adsorb on the surface and hinder the NO adsorption. The Pd-0 sites were essential for dissociative adsorption of methane. Under conditions where the catalyst was fully active for NO reduction, NH3 was seen to form as molecularly adsorbed species on Lewis acid sites. It appears that hydrogen abstraction from methane is a prerequisite for the formation of NHx species, which are believed to act as a reducing agent for adsorbed NO, although direct interaction of nitro/nitroso species with surface CHx remains a possibility. The Gd addition was found to change the catalytic chemistry significantly, possibly due to its high electropositivity, which helps stabilize the electron density at the Pd sites.