Hydrogen production by partial oxidation of methanol (CH3OH + 1/2 O-2 reversible arrow 2 H-2 + CO2) was studied over zinc oxide-supported Pd catalysts. Catalyst performance was investigated as a function of the Pd loading and pretreatment in hydrogen environment under feed ratios O-2/CH3OH (molar) of 0.3 and 0.5 at 503-543 K. High yields of hydrogen were obtained under integral operation regime. The hydrogen selectivity showed a strong dependence on the methanol conversion, which suggests that oxidation and reforming steps take place consecutively. Catalyst characterization by temperature-programmed reduction, X-ray diffraction, and X-ray photoelectron spectroscopy revealed that PdZn alloys can be formed upon reduction at moderate temperatures. A shift of +0.7 eV has been observed in the binding energy of Pd 3d(5/2) core level spectrum of catalyst 1% Pd/ZnO prereduced at temperatures as low as 373 K and catalyst 5% Pd/ZnO reduced at 573 K and above. The relative ease with which PdZn alloy is formed in 1% Pd/ZnO catalyst is explained in terms of a stronger metal-metal oxide interactions of the smaller Pd particles. PdZn alloys were also detected by X-ray diffraction on the 2% Pd/ZnO catalyst after on-stream operation. Pretreatments of the catalysts in hydrogen at high temperatures led to sintering of metallic particles with the subsequent drop in methanol conversion.