Abstract: The effect of palladium concentration on the activity and selectivity of alkane isomer- ization Pd/HM catalysts has been investigated under conditions nearly the same as in in- dustrial practice. It has been concluded that both the activity and selectivity increase li- nearly with metal concentration in the range of 0. 025-0. 25% Pd. The optimal metal concentration lies in the range of 0. 25-0. 5% Pd; beyond 0. 85% Pd, however, the ac- tivity and selectivity decrease again. The behaviours of HM and Pd/HM catalysts are rather different from each other. Incorporation of even very small amount of palladium into HM will largely improve the stability. It remains unchanged in the whole reaction time longer than 10 h in our experiments. Even for long time (1000h) running in industrial practice, the catalysts prove as efficient as in our laboratory tests. Based on experimental results and beha- viours of metal and mordenite, the mechanism of the isomerization of light paraffin hydrocarbons has been proposed. It was revealed that both the bifunctional and acidic mechanism are involved in alkane isomerization with Pd/HM catalysts.