The catalyst system consisting of Pd, Ti-modified MCM-22, and methanol was found to catalyze the epoxidation of propylene with molecular oxygen without hydrogen and PO was formed with a PO yield above 19.5% and 458 turnovers based on palladium. The catalyst performance of Pd is affected by the properties of Ti-modified MCM-22 such as BET surface area and the amount of NH3 adsorption. The catalyst material consisting of palladium and Ti-modified MCM-22 can be recovered and used 3 times without reduction in the PO yield. It is assumed that not only palladium but also peroxy intermediates derived from methanol/oxygen play an important role in the oxidation of propylene. (C) 2003 Elsevier Inc. All rights reserved.