The state of palladium and copper on the surface of the PdCl2–CuCl2/γ-Al2O3 nanocatalyst for the low-temperature oxidation of CO by molecular oxygen was studied by various spectroscopic techniques. Using X-ray absorption spectroscopy (XAS), powder X-ray diffraction (XRD), and diffuse reflectance infrared Fourier transform spectroscopy (DRIFTS), freshly prepared samples of the catalyst were studied. The same samples were also evaluated after interaction with CO, O2, and H2O vapor in various combinations. It was shown that copper exists in the form of Cu2Cl(OH)3 (paratacamite) nanophase on the surface of the catalyst. No palladium-containing crystalline phases were identified. Palladium coordination initially is comprised of four chlorine atoms. It was shown by XAS that this catalyst is not capable of oxidizing CO at room temperature in the absence of H2O and O2 over 12 h. Copper(II) and palladium(II) are reduced to Cu(I) and Pd(I,0) species, respectively, in the presence of CO and H2O vapor (without O2). It was found by DRIFTS that both linear (2114 cm−1, 1990 cm−1) and bridging (1928 cm−1) forms of coordinated CO were formed upon adsorption onto the catalyst surface. Moreover, the formation of CO2 was detected upon the interaction of the coordinated CO with oxygen. The kinetics of CO oxidation was studied at 18–38 °C at an atmospheric pressure for CO, O2, N2, and H2O (gas) mixtures in a flow reactor (steady state conditions).