The effect of sulfur on the water-gas-shift (WGS) activity of Pd/ceria catalysts has been studied using steady-state rate measurements, pulse-reactor studies, and FTIR. After exposing Pd/ceria to SO2 at 673 K in an oxidizing environment, the WGS rates dropped to a value close to that observed on Pd/alumina. Both pulse-reactor and FTIR measurements showed that cerium sulfates can be readily reduced by CO and re-oxidized by O2 at 723 K; however, unlike reduced ceria, the Ce2O2S formed by reduction of the sulfates cannot be re-oxidized by H2O or CO2. The implications of these measurements for understanding oxygen-storage capacity (OSC) of three-way catalysts are discussed.