Efficiently treating methane emissions in transportation remains a challenge. Here, we investigate palladium and platinum mono- and bimetallic ceria-supported catalysts synthesized by mechanical milling and by traditional impregnation for methane total oxidation under dry and wet conditions, reproducing those present in the exhaust of natural gas vehicles. By applying a toolkit of in situ synchrotron techniques (X-ray diffraction, X-ray absorption and ambient pressure photoelectron spectroscopies), together with transmission electron microscopy, we show that the synthesis method greatly influences the interaction and structure at the nanoscale. Our results reveal that the components of milled catalysts have a higher ability to transform metallic Pd into Pd oxide species strongly interacting with the support, and achieve a modulated PdO/Pd ratio than traditionally-synthesized catalysts. We demonstrate that the unique structures attained by milling are key for the catalytic activity and correlate with higher methane conversion and longer stability in the wet feed.