We have used the technique of in situ electron microscopy to study the oxidation and reduction of the palladium (Pd) catalysts. In this study, we have subjected a Pd catalyst to oxidation and reduction cycles and studied the changes in particle structure and morphology with in situ electron diffraction and imaging. The PdO particles can be reduced to Pd metal in situ at temperatures as low as 200°C in an atmosphere of a few Torr of both H2 and O2. We also found that essentially the same reduction occurred in the vacuums of 10−6 to 10−7 Torr in two different electron microscopes. Our in situ reduction studies show that many of the oxide particles form voids when reduced to Pd metal. The decrease in volume that occurs during reduction is often accommodated by a combination of particle shrinkage and void formation. The production of voids does not seem to depend on either the reducing atmosphere or the rate of reduction, although the voids appear to be unstable above 500°C.