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In this study, Three Way Catalysts (TWC) are investigated by using Density Functional Theory (DFT) methods and catalytic activity tests in the dynamic test system. Pd4 or Rh4 cluster adsorbed on ceria (CeO2) and ceria-zirconia (CZO) surfaces together with atomic palladium and rhodium substituted CeO2 and CZO surfaces are investigated for their catalytic activity towards carbon monoxide oxidation and nitric oxide reduction. Relative energy profiles for reaction mechanisms are obtained and activation barriers are analyzed by using CI-NEB method. Pd4 cluster adsorbed CZO surface converted both CO and NO, while CeO2 only performed CO oxidation. On Pd-CeO2 surface, Oxygen Storage Capacity (OSC) of ceria is significantly seen via facilitated formation and O2 adsorption of surface oxygen vacancy. Varying palladium, rhodium and platinum loadings impregnated on CeO2 or CZO with Al2O3 are washcoated on cordierite monoliths and catalytic activity tests are performed under simulated exhaust gas mixture. Monolithic catalysts are heated and cooled between 150˚C and 600˚C. Conversion versus temperature graph for each reactant is plotted to evaluate maximum conversion and light off temperature in cooling step. Activity data obtained from 58 tests are compared to distinguish performance change of monolithic catalysts under SO2 exposure and thermal aging. Palladium can replace rhodium, as NO reduction was successfully performed even with low loading of 0.1% wt. SO2 presence improved C3H8 conversion, instead of poisoning palladium. Al2O3 utilization is not beneficial when metals are pre-impregnated on alumina before …