The effect of Zn on the CO adsorption and oxidation reaction is examined experimentally and theoretically on two PdZn catalysts with different compositions, namely the intermetallic 1:1 β-PdZn and α-PdZn as a solid solution of 9 at% Zn in Pd. These bimetallic catalysts, made using an aerosol derived method, are homogeneous in phase and composition so that the measured reactivity excludes support effects. Both specific reactivities for CO oxidation on these two PdZn catalysts were measured. It was found that the initial rates are high and different between these catalysts, presumably due to the weakening of the CO adsorption and easier binding of oxygen to Pd sites modified by Zn. However, the rates decrease with time and become comparable to that on Pd at the steady state. With the help of density functional theory, it was suggested that the transient kinetics are due to the oxidation of Zn during the catalysis, which yields pure Pd where the reaction takes place.