Palladium is the most prominent material in both scientific and industrial research on gas storage, purification, detection, and catalysis due to its unique properties as a catalyst and hydrogen absorber. Advancing the dynamic optical phenomena of palladium reacting with hydrogen, transduction of the gas-matter reaction into light-matter interaction is attempted to visualize the dynamic surface chemistry and reaction behaviors. The simple geometry of the metal-dielectric-metal structure, Fabry–Perot etalon, is employed for a colorimetric reactor, to display the catalytic reaction of the exposed gas via water-film/bubble formation at the dielectric/palladium interface. The adsorption/desorption behavior and catalytic reaction of hydrogen and oxygen on the palladium surface display highly repeatable and dramatic color changes based on two distinct water formation trends: the foggy effect by water bubbles and the whiteout effect by water film formation. Simulations and experiments demonstrate the robustness of the proposed Fabry–Perot etalon as an excellent platform for monitoring the opto-physical phenomena driven by heterogeneous catalysis.