Palladium nanocrystals (Pd NCs) featuring abundant surface defects are successfully synthesized by using cucurbit[6]uril as a stabilizer. Employing the as-prepared Pd NCs as catalyst, an efficient approach to the direct C-H functionalization of electron-deficient polyfluoroarenes has been developed. The stable Pd NCs catalyst exhibits excellent catalytic activity and good recyclability with significantly low catalyst loading. The catalytic procedure is insensitive to air and moisture and can be manipulated under ambient environment with operational ease. Mechanistic experiments have provided credible data to support a heterogeneous catalytic mechanism of the present system. (C) 2014 Elsevier Inc. All rights reserved.