One way of enhancing the thermal stability and NO_x, THC and CO conversion of a catalyst is to improve the thermal stability and oxygen storage capacity (OSC) of the ceria. The appropriate mixing ratios of bulk and stabilized ceria are especially very important for designing Pd-only three-way catalysts. In this paper, we discuss the surface phenomena of stabilized and unstabilized (bulk) ceria, the OSC of catalysts, and the correlation between activity and OSC of Pd-only catalysts with mixing ratios of bulk ceria and stabilized ceria.