Methanol can be selectively decomposed to carbon monoxide and hydrogen at a reaction temperature as low as 433 K over ceria-supported palladium catalysts prepared by deposition–precipitation and by impregnation methods, with the former method resulting in the higher catalytic activity. Cationic palladium species can be present in the catalyst prepared by deposition–precipitation even after reduction with hydrogen at 773 K. On the other hand, metallic palladium is the major species in the impregnated catalyst. A largely excessive amount of carbon monoxide over the palladium content is adsorbed at room temperature on the deposition–precipitation samples when reduced at 573 K, however, this phenomenon does not occur with the impregnation method. This suggests that the cationic palladium species enhance the transfer of carbon monoxide from the palladium sites to the ceria surface at room temperature. The adsorption strength of carbon monoxide on the cationic species is probably weaker than on the metallic surface, this may be advantageous in the methanol decomposition, which is suppressed in the presence of carbon monoxide.