This research is focused on the analysis of adsorbed CH4 intermediates at oxidized Pd9 nanoparticles supported on γ-alumina. From first-principle density functional theory calculations, several configurations, charge transfer and electronic density of states have been analyzed in order to determine feasible paths for the oxidation process. Methane oxidation cycles have been considered as a further step at differently oxidized Pd nanoparticles. For low oxidized Pd nanoparticles, activation of methane is observed, whereby hydrogen from methane is adsorbed at one oxygen atom. This reaction is exothermic with adsorption energy equal to -0.38 eV. In a subsequent step, desorption of two water molecules is observed. Additionally, a very interesting structural effect is evident, mainly Pd-carbide formation, which is also an exothermic reaction with an energy of -0.65 eV. Furthermore, oxidation of such carbidized Pd nanoparticles leads to CO2 formation, which is an endothermic reaction. Important result is that the support is involved in CO2 formation. A different mechanism of methane oxidation has been found for highly oxidized Pd nanoparticles. When the Pd nanoparticle is more strongly exposed to oxidative conditions, adsorption of methane is also possible, but it will proceed with carbonic acid production at the interface between Pd nanoparticles and support. However, this step is endothermic.