A theoretical analysis was carried out on the mechanism of methane oxidation to methanol occurring on single site palladium oxide species [PdO]2+ supported on a model of Al-MCM-41 silica. Both 6- and 8-membered ring structures were considered to represent the support. The energy profile for each elementary reaction was determined from density functional theory calculations with the OPBE functional. The calculated overall activation energies are close to the experimental values. Our calculations confirm that spin inversion can play a significant role in decreasing the barrier heights for the pathways. Indeed, in this type of reactions we could show a crossing between singlet and triplet reaction paths. We showed that the mechanism for the C-H bond cleavage and for the formation of methanol has a radical nature. According to our results, the [PdO]2+ species located on a 8-membered ring of silica is more active than that deposited on a 6-membered ring. The calculated activation energies to cleave the methane C-H bond are 35 and 84 kJ/mol for the radical and ionic pathways, respectively. The activation barrier and the transition state geometry of this H-abstraction step are directly correlated with the optimal angle at which the substrate should approach the [Pd═O]2+ moiety, with the elongation of the Pd-Ooxo bond and finally with the energy of the π* acceptor orbital.