Besides the Pd/Al2O3, the Pd-CeO2 catalysts are the indispensable and promising candidates for methane combustion. The Pd-CeO2 composites with intimate interaction realized by elaborate methods are regarded as the most active formulations. However, more facile and cost-efficient methods are needed for industrial application. Herein, the Pd was incorporated into the lattice of the Mn-doped CeO2 by an optimized co-precipitation method to synthesize the PdCeMnO-CP catalyst. The PdCeMnO-CP showed much higher catalytic activity with the T10 decreased by 70 °C than that of the Pd/CeMnO-Imp prepared with impregnation. The partial exsolution of the initially doped Pd species and the lowered valence of Pd (from Pd4+ to Pdδ+, δ: 2 ∼ 4) during the reaction were confirmed by the low-temperature CO-DRIFTs, CO-pulse chemisorption, XRD and XPS, which were responsible for the activity enhancement. The undercoordinated Ce4+ species were generated during the reaction, thus improving the mobility of the lattice oxygen which is vital for the methane combustion following the MvK mechanism. The PdCeMnO-CP also showed higher activity for the complex methane-containing three-way catalytic reactions than the Pd/CeMnO-Imp, demonstrating its potential for industrial application.