Biogenic nanoparticles are promising materials for their green synthesis method and good performance in stimulation on reduction of environmental contaminants. In this study, Pd(0) nanoparticles (bio-Pd) were generated by Klebsiella oxytoca GS-4-08 in fermentative condition and in-situ improved the azo dye reduction. The bio-Pd was mainly located on cell membrane with a size range of 5-20 nm by TEM and XRD data analyses. Anthraquinone-2-disulfonate (AQS) greatly increased the reduction rate of Pd(II) with a reduction efficiency as high as 96.54 +/- 0.23% in 24 h. The quinone respiration theory, glucose metabolism and the biohydrogen pathway were used to explain the enhancement mechanism of the in-situ generated bio-Pd on azo dye reduction. These results indicate that the in-situ generated bio-Pd by K. oxytoca strain is efficient for azo dye reduction without complex preparation processes, which is of great significance for the removal and subsequent safe disposal of hazardous environmental compounds.