The very limited durability of Pd-based anode for direct formic acid fuel cells (DFAFCs) has seriously restricted their practical application. However, the mechanistic clarification on how to remove the poisoning species and to reactivate the Pd-based anode still remains a big challenge. In this work, we have found that Pd oxides/hydrous oxides (POHOs) play a crucial role in promoting better performance and minimizing performance degradation of the Pd-based DFAFCs. The POHOs are unstable under DFAFC conditions. The intrinsic presence or introduction of Pd oxides/hydrous oxides during electrocatalysis of formic acid oxidation is found to promote elimination of poisoning species, thereby leading to a better performance of DFAFCs. The consumption of Pd oxides/hydrous oxides under DFAFC conditions leads to formation of adsorbed CO-like intermediates that are non-removable, and contribute to the irreversible performance degradation. The present study provides new insights into the degradation mechanism of Pd-based DFAFCs and suggests design features for new durable Pd-based nanostructured catalysts. (C) 2011 Elsevier B.V. All rights reserved.