Abstract The gas-phase hydrogenation of phenol (423≤T≤573 K) has been studied over a 1% w/w Pd/MgO catalyst prepared by impregnation of MgO with (NH4)2PdCl6. The catalyst precursor was activated by precalcination in air at 473 K followed by reduction in hydrogen at 573 K. Temperature-programmed reduction/desorption (monitoring H2 consumption and NH3, H2O, CO, and CO2 release) has revealed the presence of ammonium carbonate and/or ammonium hydrogen carbonate on the active surface in addition to a metallic palladium component. Whereas the latter was not detectable by X-ray diffraction due to the high metal dispersion, transmission electron microscopy revealed that the mean palladium particle diameter is 1.3±0.2 nm, which corresponds to a palladium dispersion of DPd=71%. Besides conventional and high-resolution transmission electron microscopy, selected area electron diffraction provides some insight into the fine structure of the palladium crystallites. Impregnation followed by calcination is shown to transform MgO to Mg(OH)2 while the additional reduction step generates a surface phase that is composed of both needle-like Periclase MgO and Mg(OH)2. X-ray photoelectron spectrometric analyses of the activated catalyst has established the presence of zero-valent palladium which appears to be electron rich as a result of metal–support interaction; a degree of palladium charging is also evident as well as residual surface chlorine. The effects on fractional phenol conversion and reaction selectivity of varying such process variables as reaction time, temperature, and phenol molar feed rate are considered and the possibility of thermodynamic limitations is addressed. Hydrogenation was observed to proceed in a stepwise fashion with cyclohexanone as the partially hydrogenated product and cyclohexanol as the fully hydrogenated product. The catalyst delivered a 96% selectivity with respect to cyclohexanone production at 423 K but the cyclohexanone yield decreased at higher temperatures as conversion declined and cyclohexanol was increasingly preferred. Conversion and selectivity were both stable with prolonged catalyst use, i.e., time on stream in excess of 55 h.