In this work, metal oxides with different phase structures (stannic oxide, zirconia and tin-zirconium binary oxide) were designed to construct palladium-based catalysts. The factors affecting methane combustion over catalysts were revealed by exploring the reasons for the enhancement and depression of catalytic performance under various reaction conditions. The formation of SnxZr1−xO2 solid solutions not only generated abundant oxygen vacancies to improve the reducibility of PdO and the redox of Pd↔PdO, but also induced the formation of active PdOx, conjointly leading to the excellent catalytic activity and hydrothermal stability. Under SO2-containing atmosphere, the thermodynamically favorable formation of stable Zr(SO4)2 caused the significant diminish of oxygen vacancies and active Pd step sites in catalysts. Consequently, the sulfur-resistance and regeneration performance of Zr-containing catalysts were inferior to those of Pd/SnO2. The above contrast manifested that both oxygen vacancies and active palladium species were responsible for the efficient and stable methane combustion.