High dispersed palladium nanoparticles with the size of about 3.8 nm confined within ZSM-5 zeolite catalyst (Pd/ZSM-5-IS) was successfully synthesized by in situ synthesis method based on azeotropic distillation assisted fabrication. Liquid phase selective hydrogenation of p-nitrophenol (PNP) to p-aminophenol (PAP) was chosen as model reactions to evaluate the catalytic behavior of the Pd/ZSM-5 catalysts. Thiophene and 4,6-dimethyldibenzothiophene were used as poisons to test their anti-poisoning ability. Pd/ZSM-5-IS catalyst exhibited higher catalytic activity in hydrogenation of PNP to PAP than sample prepared by impregnation method (Pd/ZSM-5-IM), which was mainly attributed to entering of Pd nanoparticles into the intracrystalline mesovoids of the ZSM-5 support for in situ method efficiently prevent active sites from loss and aggregation. In addition, Pd/ZSM-5-IS catalyst not only maintained high activity for five consecutive runs, but also showed high sulfur tolerance for the hydrogenation reactions. This simple and versatile method also can be extended to cover many kinds of other supported catalysts for broad applications in many other catalytic reactions in the future. (C) 2015 Elsevier B.V. All rights reserved.