Cu/CeO2, Pd/CeO2, and CuPd/CeO2 catalysts were prepared and their reduction followed by in-situ XPS in order to explore promoter and support interactions in a bimetallic CuPd/CeO2 catalyst effective for the oxygen-assisted water-gas-shift (OWGS) reaction. Mutual interactions between Cu, Pd, and CeO2 components all affect the reduction process. Addition of only 1 wt% Pd to 30 wt% Cu/CeO2 greatly enhances the reducibility of both dispersed CuO and ceria support. In-vacuo reduction (inside XPS chamber) up to 400 °C results in a continuous growth of metallic copper and Ce3+ surface species, although higher temperatures results in support reoxidation. Supported copper in turn destabilizes metallic palladium metal with respect to PdO, this mutual perturbation indicating a strong intimate interaction between the Cu–Pd components. Despite its lower intrinsic reactivity towards OWGS, palladium addition at only 1 wt% loading significantly improved CO conversion in OWGS reaction over a monometallic 30 wt% Cu/CeO2 catalysts, possibly by helping to maintain Cu in a reduced state during reaction.