The strong dependence of catalytic activity and selectivity on the size of nanoparticles has imposed great value on facile methods to tailor metal nanoparticles (NPs) with uniform dispersion on a heterogeneous support. Here, a simple and effective method for re-activating sintered Pd NPs decorated on carbon supports is demonstrated using HNO3 vapour at mild temperatures in a closed system, without loss in the Pd content. We further reveal that nitrogen oxides play an important role in the re-dispersion of Pd NPs. In a catalytic phenol hydrogenation reaction, the re-dispersed NPs exhibited superior catalytic activity as compared to sintered Pd NPs supported on CNTs.