Reported here is our recent investigation of the mechanism of the selective nitric oxide reduction by hydrocarbons on Cu-ZSM-5 catalysts in an oxygen-rich gas mixture. We studied the copper oxidation state change during the catalytic reaction using the X-ray Absorption Near Edge Structure (XANES) method. We observe that even under strongly net oxidizing conditions, a significant fraction of the copper ions in ZSM-5 is reduced to Cu(I) at elevated temperature, when propene is present in the reactant stream. XANES spectra show that the Cu(I) 1s --> 4p transition intensity, which is proportional to cuprous ion concentration, changes with the reaction temperature in a pattern similar to the NO conversion activity. For comparison purposes, we also studied the Cu(I) concentration change using a gas mixture in which propene was replaced by a stoichiometrically equivalent concentration of methane. Unlike propene, methane provides no NO selective reduction pathway over Cu-ZSM-5. No window of enhanced Cu(I) concentration was observed using methane as the reductant. Our study indicates that, even in a strongly oxidizing environment, cupric ion can be partially reduced by propene to form Cu(I), possibly by way of allylic intermediate, which may be a crucial step for effective NO conversion through a redox mechanism.