The one-step synthesis of methyl isobutyl ketone from acetone and hydrogen was investigated by using Pd/Nb2O5 . nH(2)O catalyst. Pd/Nb2O5 . nH(2)O showed much higher catalytic activity and selectivity than Pd/gamma-Al2O3. Palladium metal, supported on niobic acid, seems to inhibit the hydrogenation of C=O double bond. As a result, isopropanol was scarcely formed. Efficiency of the bifunctional catalyst probably depends not only on its acidic character but also on the dispersion state of the palladium metal on the catalyst surface. The catalytic activity of Pd/Nb2O5 . nH(2)O, as was expected, decreased slightly with an increase in the water content. This is one of the excellent properties of niobic acid in comparison with other usual solid acids, Pd/Nb2O5 . nH(2)O catalyst also showed good durability for methyl isobutyl ketone formation.