Near-ambient pressure X-ray photoelectron spectroscopy (NAP-XPS) is an emerging operando method due to its inherent surface sensitivity resulting from the small inelastic mean path of the photoelectrons. It can be applied to monitor structural evolution in adsorption, segregation, alloying, and coking during ongoing reactions in the few mbar pressure range. For example, PdO (or PdOx) was believed to be the active phase for methane combustion on Pd/Al2O3 from the ex situ studies. However, operando NAP-XPS suggests a new surface phase of PdO seeds on a Pd5O4 surface oxide, governed by a delicate balance of seed formation and methane reduction. Such PdO decomposes, and the reaction proceeds on metallic Pd at 350 o C and above, but with its near-surface region saturated by dissolved oxygen. As shown in Figure , the surface electronic structure of the working catalysts was followed by in situ NAP-XPS. Conventional Pd1/CeO2 catalyst contains two oxidation states during CO oxidation at 50 o C in the Pd 3d core-level spectrum. The more intense component at 337.8 eV corresponds to the atomically dispersed Pd 2+ ions covalently bonded to CeO2. In comparison, the second one, located at ~336 eV, is attributed to small PdOx clusters, indicating the susceptibility of Pd SACs to reduction and agglomeration even under mild reaction conditions.