The relationship between the chemical state and the catalytic activity of Pd was studied to improve direct hydroxylation by-using a Pd membrane reactor. Pretreatment with oxygen or hydrogen at 473 K caused the surface of Pd to easily suffer from oxidation or reduction, respectively, but did not affect the hydroxylation activity. The surface state of Pd during the reaction could be divided into two major regions: the oxidized region near the gas entrance of the reactor, which favored complete oxidation, and the reduced region near the gas exit, which favored hydrogenation. These two surface states depended on the concentration of oxygen-and hydrogen both inside and outside the membrane during the reaction. After the reaction or after both pretreatments, significant morphological changes of the membrane were not detected by SEM. (c) 2006 Elsevier B.V. All rights reserved.