The development of an active but cheaper catalyst is critical for efficient photocatalytic hydrogen from renewable source. In this study, we develop a high active catalyst for hydrogen evolution from formaldehyde via alloying of Pd with Ag and sensitization with a dye eosin Y (EY). The XRD, XPS, TEM and HRTEM characterizations indicate that the catalyst exhibits a core-shell structure (Ag core and Ag-Pd shell). Alloying Pd with Ag not only provides more efficient catalytic sites than single component Pd catalyst, but greatly promotes the efficient electron transfer and prolongs the lifetime of photogenerated electrons, enhances the charge separation efficiency and the photocatalytic hydrogen evolution activity significantly. The catalyst activity for hydrogen is highly dependent on the adsorption energies of HCHO and H2O molecules on metal surface of the alloy catalyst. Our results disclose a new route to high efficient catalyst development for solar hydrogen generation from formaldehyde.