Designing highly efficient and low-cost catalysts is essential toward realizing the practical application of hydrogen generation by formic acid decomposition (FAD) under ambient conditions. Herein, we report the synthesis of a hybrid material of Pd nanoparticles encapsulated within carbon nanotubes (CNTs) (Pd-CNTs-in). Transmission electron microscopy images show that most Pd nanoparticles (mean diameter 4.2 +/- 0.8 nm) are located inside the nanotubes. Temperature-programmed reduction studies of H-2 reveal that the average reduction temperature of the Pd(II) species adsorbed on the interior wall of the CNTs is 12 degrees C lower than those adsorbed on the outer walls of the CNT. Moreover, the as-prepared Pd-CNTs-in catalysts show extremely high FAD activity and durability at ambient temperature. The turn over frequency (TOF) value is as high as 1135 h(-1) for the initial 10 min and does not decay significantly during the consecutive 3-time recycling studies. X-Ray photoelectron spectroscopy (XPS), surface enhanced infrared spectroscopy (SEIRAS), and gas chromatography (GC) studies indicate that CNT confinement induced electronic structure modulation of Pd could be the major reason for the enhancement of FAD catalysis on the Pd-CNTs-in surface. This work could provide promising strategies for the fabrication of cost-effective and high-active Pd-based catalysts for formic acid dehydrogenation. (C) 2018 Elsevier Inc. All rights reserved.