Pd/Ce0.8Zr0.2O2 catalysts modified by cobalt were prepared by a sequential impregnation method and characterized by X-ray powder diffraction (XRD), N2 adsorption/desorption (Brunauer-Emmet-Teller), oxygen storage capacity (OSC), CO-chemisorption, H2-temperature-programmed reduction (H2-TPR) and X-ray photoelectron spectroscopy (XPS). The effect of Co on the performance of methanol decomposition was eval-uated at a fixed-bed microreactor. The results showed that the addition of Co can improve the oxygen storage capacity of the catalyst and the dispersion of Pd. XPS results indicated that Pd was in a partly oxidized (Pdδ+, 1<δ<2) state and Co2+was present in Pd catalysts modified by Co. A 90%conversion of methanol was achieved at around 280?C over Pd-Co/Ce0.8Zr0.2O2 catalyst which was 20?C lower than that over Pd/Ce0.8Zr0.2O2, indicating that both Pdδ+and Co2+play an important role in improving the catalytic activity of methanol decomposition.