Palladium nanoparticles (Pd NPs) encapsulated within hollow silica nanospheres (Pd@SiO2) (20–35 nm) were synthesized using Pd(NH3)4Cl2 as precursor in a polyoxyethylene-nonylphenyl ether/cyclohexane reversed micelle system followed by NaBH4 reduction. Pd NPs supported on silica nanospheres (Pd/SiO2) were prepared by the conventional impregnation of Pd(NH3)4Cl2 precursor to silica nanospheres, which were prepared using a similar reversed micelle system without Pd precursor, followed by NaBH4 reduction. The as-sythesized Pd@SiO2 and Pd/SiO2 catalysts have high catalytic activities, in comparison to Pd NPs supported on commercial silica, for the decomposition of formic acid at convenient temperature for chemical hydrogen storage. Remarkably, it has been observed that the interactions of the Pd nanoparticles with surface groups of silica supports are important for the catalytic performance.