The catalytic oxidation of methane (CH4) stands as an essential strategy for curtailing greenhouse gas emissions. This study advances CH4 oxidation using Pd on La-doped CeO2, where water (H2O) boosts oxidation efficiency. The temperature for obtaining 50 % CH4 conversion on Pd/La-CeO2 catalyst was reduced from 288 °C (without H2O) to 260 °C (with H2O), while that on CeO2 was 570 °C both under conditions with and without H2O. Operando DRIFTS analysis reveals the reaction pathway and intermediates during CH4 oxidation. Ce cations provide adsorption sites for CH4, leading to the generation of CH3 adsorbed species with the help of surface O2–. La doping creates oxygen vacancies essential for oxygen activation and foster the formation of reactive hydroxide (OH) from adsorbed H2O and O. Pd contributes to the formation of more reactive oxygen species that facilitate OH generation at La cations and the oxidation of CH4 adsorption species to CO2 and H2O. The synergistic interplay between Pd and La-CeO2 is particularly noteworthy, with H2O also playing a role in the gasification of surface carbonates, thereby enhancing the overall performance of CH4 oxidation. A kinetic model based on the Langmuir-Hinshelwood mechanism is proposed, offering an insight into CH4 oxidation.