This study reports a new strategy for stabilizing palladized iron (Fe-Pd) nanoparticles with sodium carboxymethyl cellulose (CMC) as a stabilizer. Compared to nonstabilized Fe-Pd particles, the CMC-stabilized nanoparticles displayed markedly improved stability against aggregation, chemical reactivity, and soil transport. Transmission electron microscopy (TEM) and dynamic light scattering (DLS) analyses indicated that the CMC-stabilized nanoparticles with a diameter < 17.2 nm are highly dispersed in water. Fourier transform infrared (FTIR) spectroscopy results suggested that CMC molecules were adsorbed to iron nanoparticles primarily through the carboxylate groups through monodentate complexation. In addition, -OH groups in CMC were also involved in interactions with iron particles. Batch dechlorination tests demonstrated that the CMC-stabilized nanoparticles degraded trichloroethene (TCE) 17 times faster than their nonstabilized counterparts based on the initial pseudo-first-order rate constant. Last, column tests showed that the stabilized nanoparticles can be readily transported in a loamy-sand soil and then eluted completely with three bed volumes of deionized (DI) water.