Pd/Al2O3 catalysts prepared by the impregnation of alumina free of chlorine with H2PdCl4 and Pd(NO3)(2) precursors were characterised and their catalytic activity in methane oxidation was measured under oxygen-rich conditions. The presence of residual chlorine ions either originating from the precursor or from impregnation with HCl was shown to strongly inhibit the conversion of methane. Residual chlorine ions could be slowly removed under reaction conditions in the form of HCl. This was observed by in situ measurement of HCl departure and catalytic activity. Experimental data were explained by a simple model in which residual chlorine would block PdO surface active sites during the reaction. The resulting catalyst, free of chlorine ions, was similar to the one prepared from the nitrate precursor in terms of dispersion and activity, Chlorine-free catalysts exhibited slow deactivation with time on stream, which was tentatively attributed to the slow conversion of the active PdO phase into a less active Pd(OH)(2) phase. This interpretation was supported by the poisoning effect of water vapour observed upon addition of water to the feed while CO2 had no influence. Regeneration of the catalyst could be achieved by purging in dry carrier above 500 degrees C, which could be ascribed to the decomposition of Pd(OH)(2) into PdO.