The water-forming reaction (WFR) between oxygen and hydrogen on metal surfaces is an important reaction in heterogeneous catalysis. Related research mostly focused on crystalline metal surfaces and thick films; however, supported nanoparticles (NP) have been rarely considered as well as a possible influence of the support on the NP catalytic activity. Here, we report on the WFR on graphite-supported palladium NPs and nanoislands (NI), which are characterized at room temperature and under ultrahigh vacuum conditions (UHV) by scanning tunneling microscopy (STM), noncontact atomic force microscopy (nc-AFM), Kelvin probe force microscopy (KPFM), and X-ray photoemission spectroscopy (XPS). We show that during the first cycles of sequential O2 and H2 pulses, atomic H reacts off preadsorbed atomic O, which can be followed by KPFM via monitoring the change in work function (WF) at the NPs and NIs. However, after a few WFR cycles, the WF changes get smaller and the mean WF of the Pd increases due to an irreversible deactivation of the catalyst: a filament structure is formed on the facets by O and C, which the latter probably gets released from the graphite during the WFR. In strong contrast to the Pd\/graphite catalyst, the WFR can be followed without any changes during an unlimited number of cycles on a carbon-free Pd\/cerium oxide\/Cu(111) catalyst, which clearly shows that the support plays a role in the WFR on nanometer-sized Pd catalysts.<\/p>\n\n\n