Direct use of syngas, a cheaper hydrogen-rich gas, instead of pure hydrogen, as a deoxygenating agent for biohydrogenated diesel (BHD) production is presented in this study. Low-cost palm fatty acid distillate (PFAD), an inedible byproduct from refining palm oil, is used as a feedstock in the presence of a Pd/C catalyst. The results indicate that syngas can be effectively used in BHD production, while the achieved BHD yield is slightly lower than that obtained from pure hydrogen. The liquid products contain mostly n-C-15 and n-C-17, which fall into a diesel range. Decarbonylation is a prominent pathway under both hydrogen and syngas atmospheres. It was found that CO in syngas can act as a reducing agent, which can remove an oxygen atom from fatty acid molecules to form alkenol that could be further reduced to alkene and then cyclized to cycloparaffins. After reactivation, the activity of the catalyst could be fully recovered for at least 4 reused cycles. Reaction pathways for the catalytic deoxygenation under syngas are also proposed with the underlying mechanism on the role of CO.