The main objective of this work was to investigate the effect of background gas on ethylene removal. Specifically, based on the O2 content in the background gas, the effectiveness of the system in terms of C2H4 abatement and recognition of reaction pathways has been identified. A comparison between packed and non-packed catalysts in a dielectric barrier discharge (DBD) plasma reactor, as well as the behavior of the catalyst-packed system in the absence and presence of water vapor in the feed gas and the effect of shielding the ground electrode with the feed gas have been studied. For the plasma system without the catalyst, the C2H4 removal increased with increased specific input energy along with larger toxic byproduct (O3, NOx) generation. In the presence of a catalyst, the C2H4 removal was enhanced along with lower traces of toxic byproducts due to the availability of active sites for C2H4 and reactive species adsorption. The results also revealed that the C2H4 removal efficiency was reduced in the presence of water content in the feed gas. Furthermore, C2H4 was successfully removed by a modified DBD plasma reactor (the ground electrode was shielded with the feed gas and the reactor was packed with Pd/ZSM-5 catalysts) in which the toxic byproducts formed around the ground electrode passed through the plasma–catalyst zone. Finally, the modified DBD plasma reactor resulted in reduced overall byproducts while maintaining the removal efficiency.