A dual-catalyst system, consisting of an NO oxidation catalyst component (Co/ZrO2) and a NOx reduction catalyst component (Pd/SZ) was investigated for selective catalytic reduction of NOx under lean conditions. The integrated catalyst system is capable of performing three-distinct catalytic functions, namely, NOx reduction, combustion of unburned hydrocarbons and oxidation of carbon monoxide. The hydrothermal stability of the dual-catalyst system was investigated through steady-state and time-on-stream measurements. Water vapor was found to inhibit the NOx reduction activity of Pd/SZ, whereas it had no effect on NO oxidation over Co/ZrO2. The dual-catalyst system was capable of retaining stable catalytic activity during simulated lean exhaust treatment in the presence of 7% H2O. (C) 2010 Elsevier B.V. All rights reserved.