The reaction between CH4 and O2 (1:5) was studied by in situ XPS during heating and cooling in a 0.33 mbar reaction mixture. During heating, the reaction rate exhibited an activity maximum at 650 K, whereas no activity maximum was found during the subsequent cooling ramp. This kinetic hysteresis was assigned to the spectroscopically observed difference in the surface oxidation state. During heating, the reaction rate approached the 650 K maximum in the stability range of bulk PdO seeds among the otherwise Pd5O4 2D oxide covered surface. On the other hand, no PdO seeds were formed during cooling, most likely due to kinetic limitations of PdO nucleation on a passivating surface oxide layer containing less oxygen than Pd5O4