In situ ESR at 120-473 K permits to monitor formation of transient paramagnetic ions/complexes (isolated Pd+ sites; Pd+/H2O; Pd+/C6H6,) upon interaction of isolated Pd2+ cations stabilized by the H-ZSM-5 matrix with different organic compounds and gas mixtures (NO, O-2, H2O, H-2, propene, benzene). The in situ study provides insight into the elementary steps of redox processes on isolated Pd species in H-ZSM-5 zeolite under realistic conditions. Adsorbed water stabilizes the transient paramagnetic complex and decreases the rate of Pd2+ to Pd-0 reduction by H-2. Strong bonding of NOx ligands to Pd2+ species suppresses the reduction of Pd(II) ions. Sorption of benzene on preoxidized Pd2+/HZSM-5 is accompanied by an easy formation of organic cation-radicals and of a Pd+/benzene complex, the paramagnetic Pd+/benzene structure indicating a surprisingly high resistance to further reduction to Pd-0. Illumination of the Pd/HZSM-5 by UV-visible light causes no measurable change in the redox properties of the catalyst.