Highly dispersed palladium on nanoscale Zn1Zr1Ox mixed oxides was prepared by incipient wetness impregnation. H-2 pretreatment tuned the structure of the catalysts and, hence the catalytic performance in the steam reforming of methanol. Based on catalyst evaluation by XRD, XPS and EXAFS/XANES, it is found that high reduction temperature (400 degrees C) leads to the formation of PdZn beta alloy, which breaks the Pd-Pd bonds in the metallic Pd phase and forms low-coordinated Pd species in the domain of the metal oxides. These low-coordinated Pd species are responsible for the exclusive selectivity to CO2 as the carbon product. Methyl formate as the reaction intermediate was detected on Pd/Zn(1)Zr(1)Q(x)-R400 catalyst by in situ methanol-DRIFTS and methanol-TPSR, proving the methanol dehydrogenation and coupling reaction pathway on the low-coordinated Pd active sites. The incorporation of ZrO2 facilitates the dispersion of ZnO and Pd species and stabilizes Pd species against growth, with better stability than monometallic palladium. This work effectively shows how to prepare active and selective Pd catalysts for dehydrogenation and steam reformimg of methanol not suffering from the typical poor selectivity of metallic palladium.