CO oxidation is one of the most extensively investigated reactions in the field of heterogeneous catalysis because of its importance in both environmental protection and fundamental study. CO oxidation over Pd catalysts has attracted significant attentions not only because of their high activity. It is an excellent model reaction for the study of structure, metal-support interaction and other issues of various Pd based catalysts with many important applications beyond CO oxidation. It is simple and can be easily operated with low cost. Density functional theoretical study can be directly and easily combined with experimental investigations. Carbon monoxide itself is an excellent probe molecule for the catalyst characterization. In this perspective, we summarize the progress in the study of CO oxidation over Pd based catalysts. Various influencing factors will be discussed. Future challenges and opportunities will be addressed.