Methane is one of the most stable molecules. The first C-H bond activation of methane is a crucial step in methane conversion. Once the first C-H bond was broken, the remaining C-H bonds could be very easily activated. In this work, DFT study of the first C-H bond activation of methane over PdO/HZSM-5 catalyst for methane combustion was conducted. The 7T(6, 1) and 6T cluster models, correspond to the alpha- and beta-sites of ZSM-5 that take 85-100% of the total metal sites in the zeolite, were chosen for the study. The physisorbed state of methane and the transition state geometries of the first C-H bond dissociation were obtained. The study confirms that the oxygen in PdO directly involves in methane activation that means PdO is the active Pd species. The proton in the zeolite promotes the methane activation via the formation of H2O with OH, formed during methane activation over PdO. The barrier energy was also calculated. The activation energy of methane dissociation over 6T1Al and 7T1AI-PdO/HZSM-5 is 98 and 94 kJ/mol, respectively, while the activation energy over 6T2Al and 7T2Al-PdO/HZSM-5 decreases 16 and 22 kJ/mol, compared to that over 6T1 and 7T1Al cluster. This suggests more acidic sites would reduce the activation energy for methane activation. (c) 2005 Elsevier B.V. All rights reserved.