Starting from subsurface Zr⁰-doped “inverse” Pd and bulk-intermetallic Pd⁰Zr⁰ model catalyst precursors, we investigated the dry reforming reaction of methane (DRM) using synchrotron-based near ambient pressure in-situ X-ray photoelectron spectroscopy (NAP-XPS), in-situ X-ray diffraction and catalytic testing in an ultrahigh-vacuum-compatible recirculating batch reactor cell. Both intermetallic precursors develop a Pd⁰–ZrO₂ phase boundary under realistic DRM conditions, whereby the oxidative segregation of ZrO₂ from bulk intermetallic Pd_xZr_y leads to a highly active composite layer of carbide-modified Pd⁰ metal nanoparticles in contact with tetragonal ZrO₂. This active state exhibits reaction rates exceeding those of a conventional supported Pd–ZrO₂ reference catalyst and its high activity is unambiguously linked to the fast conversion of the highly reactive carbidic/dissolved C-species inside Pd⁰ toward CO at the Pd/ZrO₂ phase boundary, which serves the role of providing efficient CO₂ activation sites. In contrast, the near-surface intermetallic precursor decomposes toward ZrO₂ islands at the surface of a quasi-infinite Pd⁰ metal bulk. Strongly delayed Pd carbide accumulation and thus carbon resegregation under reaction conditions leads to a much less active interfacial ZrO₂–Pd⁰ state.