A new Pd-Rh three-way catalyst (TWC) for close-coupled (CC) applications was developed to improve low temperature gas activity. In this study the TWC has a layered structure with Pd in the top layer and Rh in the bottom layer. The specific objectives of this study was to compare Ba and La additives to Pd in the top layer. Alumina was used for the Pd support and La or Ba were co-impregnated with Pd. The catalysts were engine aged at 950°C for 200 h and evaluated on a vehicle using the European NEDC test, for CO, HC and NOx performance. After this aging, the Pd-La catalyst showed higher gas performance than the Pd-Ba catalyst, especially in the cold start region. This improvement was correlated to the Pd particle size and the sintering suppression observed upon addition of La. Sintering suppression was also observed upon addition of Ba; however, the mechanism appears to be different from that of La addition. In the case of Ba addition, the sintering suppression mechanism appears to have occurred by improving the heat resistance of alumina and stabilization of the PdO state, while in the case of La addition, it appears that stabilization of Pd occurred by an anchoring effect due to formation of an alloy between Pd and La. It was also observed that addition of basic Ba and La oxides resulted in low temperature NO adsorption. The thermal desorption of NO started at a lower temperature for La-Pd than for Ba-Pd. Therefore, in vehicle evaluations, the La-Pd catalyst appeared to have a positive effect on the light-off due to an increased NO concentration near Pd, and by this means contributed more towards the NO-CO reaction than on the Ba-Pd catalyst.