Ultrathin metal films can exhibit quantum size and surface effects that give rise to unique physical and chemical properties. Metal films containing just a few layers of atoms can be fabricated on substrates using deposition techniques, but the production of freestanding ultrathin structures remains a significant challenge. Here we report the facile synthesis of freestanding hexagonal palladium nanosheets that are less than 10 atomic layers thick, using carbon monoxide as a surface confining agent. The as-prepared nanosheets are blue in colour and exhibit a well-defined but tunable surface plasmon resonance peak in the near-infrared region. The combination of photothermal stability and biocompatibility makes palladium nanosheets promising candidates for photothermal therapy. The nanosheets also exhibit electrocatalytic activity for the oxidation of formic acid that is 2.5 times greater than that of commercial palladium black catalyst.