The activity, selectivity, and rate of deactivation of sulfated zirconia catalysts for isomerization of n-butane at 423 K depend on the temperature at which the catalyst is dried following initial calcination and exposure to air. The optimum drying temperature for the sample of this study is 548 K. The addition of 75 mu mol/g of water to a sample dehydrated at 773 K restores high catalytic activity. Excessive catalyst hydration leads to low catalytic activity by causing extensive hydrogen bonding at the active sites. Changes in catalytic activity with drying temperature are not directly related to a transformation of Bronsted to Lewis acid sites. Rather, the surface sulfate species may participate in butane isomerization via a reduction-oxidation cycle, and water may promote the catalytic activity by altering the oxidation-reduction properties of the surface sulfate species.