The activation of propane and isobutane in acidic zeolite H-ZSM-5 in the presence of both CO and H2O has been studied by in situ solid-state NMR and GC analysis. Evidence was provided for the conversion of propane to isobutyric acid at 373-473 K by cleavage of the C-C bond; methane and ethane are also produced. Isobutane is transformed into pivalic acid with simultaneous production of hydrogen. The low conversion (1-2%) at this temperature was rationalized by the existence of a small number of sites that are capable of generating carbenium ions which are trapped by CO at this temperature. A formate species was observed when CO and H2O were present on H-ZSM-5. This species disappeared in the presence of the alkane. At 573 K, the generation of large amounts of CO2 indicates a much higher conversion of the alkanes into carboxylic acids which, however, decompose under the reaction conditions.