The nucleation and growth of Pd clusters in mordenite were investigated using in situ extended X-ray absorption fine structure (EXAFS) spectroscopy and Fourier transform infrared (FTIR) spectroscopy of adsorbed CO. Calcination of [Pd(NH3)(4)](2+)-exchanged mordenite at 350 degrees C in O-2 results in decomposition of the amine complex and formation of square planar Pd2+ oxo species within the mordenite pores. Reduction of these species at 150 degrees C in H-2 yields Pd clusters with an average nuclearity of 3. On an average two 2.22 Angstrom Pd-O bonds are associated with each Pd-3 cluster; we infer that this interaction serves to anchor the clusters within the pores. After reduction at 150 degrees C, the FTIR spectrum of irreversibly adsorbed CO is indicative of a mixture of Pd+, Pddelta+, and Pd-0 carbonyl species. Reduction at 350 degrees C produces larger intrazeolitic Pd clusters (average nuclearity of 6) that exhibit only a weak interaction with the mordenite, as evidenced by their facile aggregation in the presence of CO at 30 degrees C. Reduction at 450 degrees C yields large 20 Angstrom Pd clusters that we infer are located on external mordenite surfaces or locally disrupt the intracrystalline structure.