Supported palladium catalysts have been tested for methane combustion under lean conditions in the temperature range of 200-800 degrees C. The effect of diluting the reaction mixture with high amounts of water and carbon dioxide was studied in order to simulate a combustion process with exhaust gas recirculation. The influence of support material, i.e. ZrO2 or doped CeO2, on the catalytic performance was also investigated. The catalyst support material was found to influence the light-off temperature significantly, which increased in the following order: Pd/ZrO2 < Pd/Zr-CeO2 < Pd/La-CeO2. The order of activity changed at higher temperatures resulting in Pd/La-CeO2 being the most active catalyst above 670 degrees C. This catalyst also shows a more stable performance with no distinct deactivation occurring at higher temperatures during cooling. Both water and CO2 were found to have a negative influence on the catalytic activity. The inhibitory effect was, however, more pronounced for water. This inhibitory effect was present in the entire temperature range investigated. Adding CO2 in the presence of water resulted in conversions similar to the ones observed when feeding water alone for Pd/ZrO2 and Pd/La-CeO2, On the contrary, the activity of Pd/Zr-CeO2 was further decreased when co-feeding water and CO2. (C) 2006 Elsevier B.V. All rights reserved.