Steady-state isotopic transient kinetic analysis (SSITKA) was used to study the induction phenomenon observed for the rate of methanol (MeOH) synthesis on Pd/SiO2 by evaluating the surface concentration of the active intermediates leading to MeOH (N-MeOH) and their residence times (tau(MeOH)) for the beginning and for the end of the induction period. The existence of the induction. effect was found to be unaffected by the partial pressure of CO and/or H-2; however, its magnitude (i.e., the ratio of the maximum rate of formation of MeOH to the initial rate) was higher for lower H-2/CO ratios where the catalyst had lower initial activities for MeOH synthesis. By accounting for the effect of interparticle readsorption of MeOH on the surface reaction parameters obtained by SSITKA (N-MeOH and tau(MeOH)), it was found that, during the induction period, the surface concentration of the active intermediates leading to MeOH (N-MeOH) increased significantly while the pseudo-first-order intrinsic activity of the sites leading to MeOH (1/tau(MeOH)) remained constant. Thus, the induction period for MeOH synthesis over Pd/SiO2 can best be attributed to an increase in the number of active sites/intermediates forming MeOH. The possible modifications of the Pd which might cause the induction effect are discussed in detail.