Abstract Highly active and highly dispersed Pd-loaded nano-catalysts using mercapto group (–SH) functionalized mesoporous silica supports, namely, Pd-SH-MCM-41 and Pd-SH-SBA-15, were prepared using an impregnation-reduction approach. The surface –SH groups are believed to facilitate the high distribution and immobilization of the Pd nanoparticles within the silica supports through an anchoring interaction. The catalysts featured long-range ordered structures, uniform pore size, high surface area, and highly dispersed Pd nanoparticles as characterized by X-ray diffraction, N2 adsorption-desorption, and transmission electron microscopy. The catalysts showed activity five times higher than that of commercial Pd/C catalyst and three times higher than those of Pd/MCM-41 and Pd/SBA-15 catalysts. Within 1 h of reaction at 80 °C and 1.0 MPa, the conversion of phenol attained was greater than 99%, and the selectivity for cyclohexanone was 98%.