The influence of water and carbon dioxide on the activity of a series of palladium catalysts for the combustion of methane has been studied. It has been found that both compounds have an inhibitory effect but the extent of this depends on the experimental conditions. When both are present in the feedstream, the effect of carbon dioxide is negligible, the total decrease in activity only being equal to that of water alone. It is concluded that both water and carbon dioxide poison the same active sites on the palladium oxide with water able to displace carbon dioxide to form an inactive surface hydroxide. The magnitude of the effect due to both additives decreases with increasing reaction temperature and conversion. This is due both to the increased amount of water produced in the reaction reducing the effect of added water or carbon dioxide, and to the decreasing stability of the surface hydroxide at higher temperatures. In relation to practical applications, it is concluded that carbon dioxide will have no effect on catalytic activity under normal working conditions but water present in the feedstream may reduce the activity of the catalysts very significantly at lower temperatures. However, above about 450 degrees C the effect of water is also expected to be very small.