The series of Pd/Al2O3supported catalysts with different sizes of palladium particles has been prepared and studied in total propane oxidation under various conditions. The preparation method provides a variation of the Pd particle sizes within the range of 3–6 nm and core–shell distribution of the palladium particles on alumina granules. It has been observed that an increase in Pd particle sizes leads to a parallel increase in turnover frequency (TOF) values in total propane oxidation. Both propane-to-oxygen ratio and temperature also affects the catalytic activity. Chemical state of palladium in the catalysts has been studied under the reaction conditions using in situ XPS. It has been shown that both the metallic and oxidized Pd species coexist on the catalyst surface during the propane oxidation reaction. Remarkably, evident linear correlation between TOF values and Pd2+/Pd0ratios has been revealed.