Ambient pressure X-ray photoelectron spectroscopy (APXPS) is a powerful tool to characterize the surface structure of heterogeneous catalysts in situ. In order to improve the time resolution and the signal-to-noise (S/N) ratio of photoemission spectra, we collected consecutive APXP spectra during the periodic perturbation of a powder Pd/Al2O3 catalyst away from its equilibrium state according to the modulated excitation approach (ME). Averaging of the spectra along the alternate pulses of O-2 and CO improved the S/N ratio demonstrating that the time resolution of the measurement can be limited solely to the acquisition time of one spectrum. Through phase sensitive analysis of the averaged time-resolved spectra, the formation/consumption dynamics of three oxidic species, two metal species, adsorbed CO on Pd-0 as well as Pdn+ (n > 2) was followed along the gas switches. Pdn+ and 2-fold surface PdO species were recognised as most reactive to the gas switches. Our approach demonstrates that phase sensitive detection of time-resolved XPS data allows following the dynamics of reactive species at the solid-gas interface under different reaction environments with unprecedented precision.