This study forwards a novel and simple approach for encapsulation of Phosphotungstic acid (PTA) into MIL-101(Cr) cavities to develop PTA-MIL-101(Cr) with a high surface area. In this method, the resulting surface area of PTA-MIL-101(Cr) (3563 m2/g) is 1.72 times that of MIL-101(Cr) due to the existence of more accessible pores which are formed by leaching of PTAs incorporated inside MIL-101(Cr) pores during the intense washing. Catalysts are investigated in CO oxidation under atmospheric pressure and feed composition of 1%CO, 20%O2, and 79%He. 3%Pd/PTA-MIL-101(Cr) shows 100%CO conversion at T = 145 °C and outperforms PTA, PTA-MIL-101(Cr), Pd/PTA, 1–3%Pd/MIL-101(Cr), Pd-PTA/MIL-101(Cr), and 1–5%Pd/PTA-MIL-101(Cr) thanks to the high dispersion of Pd nanoparticles (2.069 ± 0.96 nm) and the synergistic effects between Pd and PTA. The mechanism of CO oxidation is discussed and the higher activity of Pd/PTA-MIL-101(Cr) and interaction between Pd and PTA are explained using HRTEM, XPS, CO-TPD, and DRIFT analyses. The higher activity of Pd/PTA-MIL-101(Cr) compared with Pd-PTA/MIL-101(Cr) (synthesized by impregnation approach) evidences the impressive effect of the new synthesis method on PTA incorporation within MIL-101(Cr) cavities. Furthermore, Pd/PTA-MIL-101(Cr) demonstrates high stability due to the strong interaction between PTA clusters and Pd nanoparticles and the confining feature of MIL-101(Cr) cavities which inhibits the agglomeration of Pd nanoparticles and PTA clusters.