We investigated the intrinsic reactivity of CO on single-layer and multilayer PdO(101) grown on Pd(100) using temperature-programmed reaction spectroscopy (TPRS) and reflection absorption infrared spectroscopy (RAIRS) experiments, as well as density functional theory (DFT) calculations. We find that CO binds more strongly on multilayer than single-layer PdO(101) (similar to 119 kJ/mol vs 43 kJ/mol), and that CO oxidizes negligibly on single-layer PdO(101), whereas nearly 90% of a saturated layer of CO oxidizes on multilayer PdO(101) during TPRS experiments. RAIRS further shows that CO molecules adsorb on both bridge-Pd-cus and atop-Pd-cus sites (coordinatively unsaturated Pd sites) of single-layer PdO(101)/Pd(100), while CO binds exclusively on atop-Pd-cus sites of multilayer PdO(101). The DFT calculations reproduce the much stronger binding of CO on multilayer PdO(101), as well as the observed binding site preferences, and reveal that the stronger binding is entirely responsible for the higher CO oxidation activity of multilayer PdO(101)/Pd(100). We show that the O atom below the Pd-cus site, present only on multilayer PdO(101), modifies the electronic states of the Pd-cus, atom in a way that enhances the CO-Pd-cus bonding. Lastly, we show that a precursor -mediated kinetic model, with energetics determined from the present study, predicts that the intrinsic CO oxidation rates achieved on both single-layer and multilayer PdO(101)/Pd(100) can be expected to exceed the gaseous CO diffusion rate to the surface during steady-state CO oxidation at elevated pressures, even though the intrinsic reaction rates are 4-5 orders of magnitude lower on single-layer PdO(101)/Pd(100) than on multilayer PdO(101)/Pd(100).