As the automobiles move closer to the ULEV, ULEV-2 and SULEV requirements, OBD (on board diagnostic) will become a design challenge. The present OBD II designs involve the use of dual oxygen sensors to monitor the hydrocarbon performance of the catalytic converter. The aim of this study was twofold: to determine the interaction of fuel sulfur and ceria in the catalyst formulation on the performance of a Pd/Rh TWC (three-way catalyst) to elucidate the sulfur and ceria interaction on the ability of the Pd/Rh catalyst to monitor the state of the catalyst relative to hydrocarbon activity and therefore it's utility in the OBD system. Catalyst samples were aged on a spark ignited engine using a “fuel cut” engine aging cycle operated for 50 hours. Maximum catalyst temperatures during this aging cycle were 850-870°C. The effect of sulfur was determined by measuring aged catalyst performance using both indolene (∼100 ppm sulfur) and premium unleaded gasoline (∼350 ppm sulfur). The test for OBD performance was an oxygen storage capacity determination. The delay time between a front and a rear oxygen sensor was measured, as the engine was transitioned from a rich operating mode to a lean operating mode.This study showed that higher levels of fuel sulfur were associated with longer OBD delay times for both fresh and engine-aged catalysts, and that introduction of high fuel sulfur gasoline can cause errors in an OBD calibration algorithm developed for use with a low sulfur content gasoline.