The oxidation of the Pd(1 1 1) surface was studied by in situ XPS during heating and cooling in 0.4 mbar O2. The in situ XPS data were complemented by ex situ TPD results. A number of oxygen species and oxidation states of palladium were observed in situ and ex situ. At 430 K, the Pd(1 1 1) surface was covered by a 2D oxide and by a supersaturated Oads layer. The supersaturated Oads layer transforms into the Pd5O4 phase upon heating and disappears completely at approximately 470 K. Simultaneously, small clusters of PdO, PdO seeds, are formed. Above 655 K, the bulk PdO phase appears and this phase decomposes completely at 815 K. Decomposition of the bulk oxide is followed by oxygen dissolution in the near-surface region and in the bulk. The oxygen species dissolved in the bulk is more favoured at high temperatures because oxygen cannot accumulate in the near-surface region and di