The catalyst Ce0.98Pd0.02O2-δ was synthesized by combustion synthesis method and characterized by XRD and XPS. The three way catalytic activity of this catalyst was investigated by performing NO + CO reaction and CO and hydrocarbon oxidation. The rates and the apparent activation energies of the reaction for NO reduction by CO and CO and hydrocarbon oxidation were determined and the rates were higher than the reported values. The N2 selectivity in NO + CO reaction was around 80% all over the temperature region and showed complete selectivity at high temperatures. A reaction mechanism of NO + CO reaction was proposed and the experimental findings were verified with the predicted model. The high rates of the NO + CO reactions even in the presence of oxygen and the complete selectivity to the products are rationalized by the high dissociative chemisorption of adsorbed NO over the catalyst, which is for the vacant sites in CeO2 lattice due to presence of Pd2+ in Ce4+ position. The catalyst also showed high rates and lower activation energies for the oxidation of CO and hydrocarbons. © 2006 Elsevier B.V. All rights reserved.