It has been demonstrated that Nd4PdO7, when exposed to a gas mixture of CO and He, fully decomposes to Nd2O3 and nano-sized Pd-particles, which are found on the surfaces of the micron-sized Nd2O3 particles. This material, known to exhibit catalytic activity for oxidation of CO and hydrocarbons, and reduction of NO, can be reoxidised to Nd4PdO7 by heat treatment at 1085 degrees C in air for a short period of time, i.e. when utilised as catalyst this material can easily be regenerated if it has become aged. The reduced material has been studied in scanning and transmission electron microscopes (SEM and TEM) equipped with element analysis facilities, and characterised by X-ray powder diffraction (XRPD) studies. A wet-chemistry method for extraction of the nanoparticles formed has been developed, based on selective dissolution of Nd2O3, and the bare Pd-particles have been characterised by XRPD, SEM and TEM studies. The reduction and reoxidation of Nd4PdO7 material was monitored in a thermogravimetric setup. Nd4PdO7 decomposed in air to Nd2O3 and Pd at 1185 degrees C, which is approximate to 50 degrees C higher than the previously reported decomposition temperature.