We have studied Pd-Sn layers with different composition prepared by magnetron sputtering. Layers were sputtered onto A1(2)O(3) and SiO2 substrates and studied by X-ray photoelectron spectroscopy (XPS). Spectra confirmed that after vacuum annealing residual oxygen and carbon have been removed and bimetallic bonds have been created. The shift of Pd 3d(5/2) core level to higher binding energy followed by the peak narrowing in dependence on the composition was observed, accompanied by the shift of the Pd 4d in the valence band region, induced by hybridization of Pd-d and Sn-s,p states. Experiments carried out on a gas-flow reactor indicate increasing temperature of the CO oxidation with tin ratio in the alloy. (C) 2006 Elsevier B.V. All rights reserved.