Pd/CeO2 as a catalyst for methanol synthesis has been studied in a microreactor consisting of 14 structured foils in a fixed-bed laboratory reactor. Methanol synthesis was carried out at 80 bar and 300 °C with a syngas composition of H2/CO/CO2/N2 = 65/25/5/5. It was found that Pd/CeO2 as a foil coating was more active than the Pd/CeO2 powder catalyst on a Pd/CeO2 mass basis, both initially and after stabilization. In order to understand the Pd/CeO2 catalyst properties, both as a coating on the structured foils and as nanoparticles, techniques such as TEM, SEM, XRD and chemisorption were employed to characterize the catalysts before and after reaction experiments. The activity of the Pd/CeO2 foil coating is substantially better than the Pd/CeO2 powder despite significantly higher Pd dispersion of the Pd/CeO2 powder. This is ascribed to the Pd nanoparticles of the powder catalyst being partly covered by the ceria upon preparation and reduction. This prevents the accessibility of Pd to the gaseous reactants. A higher number of active sites are initially present in both catalysts, leading to high initial activity for methane as well as methanol formation. This may be explained by good interfacial contact between Pd and CeO2 created during preparation and reduction to form sites that are gradually lost under reaction conditions by a combination of sintering/agglomeration and enhanced coverage of the Pd by ceria layers.