CO and C 3 H 6 oxidation have been carried out in the absence and presence of water over a Pd/Al 2 O 3 catalyst. It is clear that water promotes CO and, as a consequence, C 3 H 6 oxidation takes place at much lower temperatures compared with the dry feed. The significant increase in the catalyst's activity with respect to CO oxidation is not simply associated with changes in surface concentration as a result of competitive adsorption effects. Utilising 18 O 2 as the reactant allows the pathways whereby the oxidation due to gaseous dioxygen and where the water activates the CO and C 3 H 6 to be distinguished. In the presence of water, the predominant pathway is via water activation with C 16 O 2 and C 16 O 18 O being the major species formed and oxidation with dioxygen plays a secondary role. The importance of water activation is further supported by the significant decrease in its effect when using D 2 O versus H 2 O.