Ce-promoted and unpromoted Pd/ZSM5 catalysts were prepared, characterized by TPR, XPS and TEM, and tested for the dehydroisomerization of alpha-limonene to p-cymene. At 300 degrees C the conversion is near 100% over all samples, but the selectivity to p-cymene depends on catalyst preparation. Ion exchange in slurries with adjusted pH resulted in catalysts with much more uniform metal loading than contacting the extruded zeolite with an aqueous solution of the metal ions. Ce promoted Pd/ZSM5 samples gave higher selectivities to p-cymene than unpromoted Pd/ZSM5. XPS data suggest an interaction between Pd- and CeO2-particles, but hydrolysis of Ce ions to Ce hydroxide gel can lead to formation of acid sites which catalyze formation of undesired byproducts. Hydrolysis can be minimized by ion exchange at low pH.