Zeolite encaged palladium clusters undergo thorough atomic reorganizations when exposed to an adsorptive such as carbon monoxide or when used as catalysts e.g. in CO hydrogenation. Exposure to carbon monoxide of metal particles, which are initially anchored to zeolite walls via proton bridges, transforms the metal clusters into small, highly mobile carbonyl clusters. They coalesce and form larger clusters. At low temperature, this process is limited by the geometric constraints of the cage windows. At higher temperatures, further growth of metal particles occurs, conceivably via partial destruction of the zeolite matrix. The interaction of the metal particles with zeolite protons gives rise to electrondeficient metal clusters, which catalyze neopentane at a much higher rate than neutral metal particles. Such clusters might also act as collapsed bifunctional sites in bifunctional catalysis.