Silica supported Pd and Pd-In catalysts with different In-Pd atomic ratios and similar particle size (∼2 nm) were tested for ethane dehydrogenation at 600 °C. For a monometallic Pd catalyst, at 15% conversion, the dehydrogenation selectivity and initial turnover rate (TOR, per surface Pd site) were 53% and 0.03 s-1, respectively. Addition of In to Pd increased the dehydrogenation selectivity to near 100% and the initial TOR to 0.26 s-1. Carbon monoxide IR, in situ synchrotron XAS and XRD analysis showed that for Pd-In catalysts with increasing In loading, different bimetallic structures were formed: at low In loading a fraction of the nanoparticle surface was transformed into PdIn intermetallic compound (IMC, also known as intermetallic alloy) with a cubic CsCl structure; at higher In loading, a Pd-core/PdIn-shell structure was formed and at high In loading the nanoparticles were pure PdIn IMC. While a Pd metal surface binds CO predominantly in a bridge fashion, the PdIn IMC predominantly binds CO linearly. Formation of the PdIn IMC structure on the catalyst surface geometrically isolates the Pd catalytic sites by non-catalytic, metallic In neighbors, which is suggested to be responsible for the high olefin selectivity. Concomitant electronic effect due to Pd-In bond formation likely leads to the increase in TOR. Though multiple IMC structures with different atomic ratios are possible for the Pd-In binary system, only a cubic PdIn IMC with CsCl structure was observed, implying a kinetically controlled solid state IMC formation mechanism.