The effect of the addition. of CO during H-2 reduction on Co-support compound formation in a Co/gamma-Al2O3 catalyst was investigated. It is known that such compound formation can occur during catalyst reduction, is facilitated by the presence of water vapor, and results in a less active catalyst. In this study, a H2 flow containing CO (1-9 vol.%) was used for standard reduction. Water vapor was also added Q vol.%) in one series of experiments in order to examine the impact of CO when relatively high partial pressures of water vapor are also present. After reduction at various conditions, the pretreated catalyst samples were characterized and CO hydrogenation (H-2/CO = 10/1, 220 degreesC, 1.8 atm) also performed. Both initial and steady-state rates during CO hydrogenation went through a maximum for the addition of 3-5 vol.% CO during standard reduction. The maximum rate was about four times that in the case where no CO was added. A similar trend was found even where reduction occurred with a high partial pressure of water vapor. It is concluded that the addition of CO during reduction has a significant effect on activity of the catalyst due to increases in both Co reducibility and dispersion.