Microbial electrolysis cell (MEC) provides a sustainable way for hydrogen production from organic matters, but it still suffers from the lack of efficient and cost-effective cathode catalyst. In this work carbon paper coated with Pd nanoparticles was prepared using electrochemical deposition method and used as the cathodic catalyst in an MEC to facilitate hydrogen production. The electrode coated with Pd nanoparticles showed a lower overpotential than the carbon paper cathode coated with Pt black. The coulombic efficiency, cathodic and hydrogen recoveries of the MEC with the Pd nanoparticles as catalyst were slightly higher than those with a Pt cathode, while the Pd loading was one order of magnitude less than Pt. Thus, the catalytic efficiency normalized by mass of the Pd nanoparticles was about fifty times higher than that of the Pt black catalyst. These results demonstrate that utilization of the cathode with Pd nanoparticles could greatly reduce the costs of the cathodic catalysts when maintaining the MEC system performance. (C) 2010 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.