A dual-catalyst bed composed of a reduction catalyst, Pd-sulfated zirconia, and an oxidation catalyst, CoOx/CeO2, was investigated for selective catalytic reduction (SCR) of NOx (NO and NO2) by hydrocarbons for use in lean-burn natural gas engines. The primary focus of this submission is to examine the hydrothermal stability of the dual-catalyst bed and improve its hydrothermal durability by studying the effect of the engine exhaust parameters. The main parameters investigated were the concentration and nature of the hydrocarbons and the reaction temperature. Both cyclic as well as time-on-stream experiments were conducted under various engine exhaust compositions and different reaction temperatures to establish the conditions that could improve the water tolerance of the dual-catalyst bed. The higher concentration of the hydrocarbon mixture in the simulated engine exhaust was seen to assist the water tolerance of the dual-catalyst bed. Experiments were performed to isolate and identify the primary component in the hydrocarbon mixture that contributed more toward water tolerance. This study revealed that ethane had a more prominent effect than methane or propane for improving the hydrothermal stability of the catalyst bed. Moreover, the effect of the reaction temperature confirmed a shift in the operating temperature window in the presence of water vapor, as higher reaction temperatures were seen to significantly improve the hydrothermal stability of the dual-catalyst bed.