Simultaneous decomposition and reduction of a Pd(2+) complex in the presence of graphene oxide (GO) lead to the formation of Pd(0)-nanoparticles (Pd-NPs) with average sizes of 4 nm firmly anchored on reduced graphene oxide (RGO) sheets. The Pd-NP/RGO hybrids exhibited remarkable catalytic activity and selectivity in mild hydrogenation reactions where the acidic properties of RGO play an active role and may act as an important game-changer.