This study investigates possible pathways to reduce water inhibition over Pd−Pt methane oxidation catalysts supported on alumina and a ceria‐zirconia mixed oxide under conditions typical for lean burn gas engines. Spatially resolved concentration and temperature profiles reveal that addition of hydrogen to the lean reaction mixture leads to significant heat production and an increase in methane conversion. Moreover, reductive pulses during operation are not only able to regenerate the catalyst deactivated by water by removal of OH‐groups from the catalyst surface, but even promote its activity after repeated application of pulsing for several hours. X‐ray absorption spectroscopy reveals the formation of a partially reduced PdO−Pd mixture during the pulsing, which explains the increase in activity. This state of high activity is stable for several hours under the tested lean conditions. The results presented in this study suggest an efficient in situ activation strategy to overcome water inhibition of methane total oxidation over Pd−Pt catalysts by careful process control.