Cyclohexanone is a key raw material for manufacturing nylon and other chemicals. The sustainable conversion of biomass-derived phenol to cyclohexanone meets the requirements of sustainable development goal but still be challenging. Herein, a catalyst containing isolated Pd cations in zeolite, namely Pd1/ZSM-5, is investigated for the partial hydrogenation of phenol to cyclohexanone. Under 140 °C and 1.5 MPa of initial hydrogen pressure, the conversion of phenol reaches 95.6% with the selectivity to cyclohexanone of 99.9%. Besides, the turnover rate (TOR) of partial hydrogenation of phenol reaches 382.7 h−1. The mild adsorption affinity of cyclohexanone on catalytic sites leads to the high selectivity. Moreover, as unveiled by surface reactivity of phenol monitored by in-situ infrared spectrum, the oxygen atom of phenol hydroxyl group is adsorbed on the Brönsted acid site of Pd1/ZSM-5 as the key reaction step. The reaction intermediate involves the partial hydrogenation of benzene ring of phenol.