Palladium catalysts have been widely adopted for organic synthesis and diverse industrial applications given their efficacy and safety, yet their biological in vivo use has been limited to date. Here we show that nanoencapsulated palladium is an effective means to target and treat disease through in vivo catalysis. Palladium nanoparticles (Pd-NPs) were created by screening different Pd compounds and then encapsulating bis[tri(2-furyl)phosphine]palladium(II) dichloride in a biocompatible poly(lactic-co-glycolic acid)-b-polyethyleneglycol platform. Using mouse models of cancer, the NPs efficiently accumulated in tumours, where the Pd-NP activated different model prodrugs. Longitudinal studies confirmed that prodrug activation by Pd-NP inhibits tumour growth, extends survival in tumour-bearing mice and mitigates toxicity compared to standard doxorubicin formulations. Thus, here we demonstrate safe and efficacious in vivo catalytic activity of a Pd compound in mammals.