Copper and zinc oxide based catalysts prepared by coprecipitation were promoted with palladium and ZrO2, and their activity and selectivity for methanol oxidative reforming was measured and characterized by N2O decomposition, X-ray absorption spectroscopy, BET, X-ray photoelectron spectroscopy, X-ray diffraction, and temperature programmed reduction. Addition of ZrO2 increased copper dispersion and surface area, with little effect on activity, while palladium promotion significantly enhanced activity with little change of the catalytic structure. A catalyst promoted with both ZrO2 and palladium yielded hydrogen below 150 °C. EXAFS results under reaction conditions showed that the oxidation state of copper was influenced by palladium in the catalyst bulk. A palladium promoted catalyst contained 90% Cu0, while the copper in an unpromoted catalyst was 100% Cu1+ at the same temperature. Palladium preferentially forms an unstable alloy with copper instead of zinc during reduction, which persists during reaction regardless of copper oxidation state. A 100-h time on stream activity measurement showed growth in copper crystallites and change in copper oxidation state resulting in decreasing activity and selectivity. A kinetic model of the reaction pathway showed that palladium and ZrO2 promoters lower the activation energy of methanol combustion and steam reforming reactions.