Direct electrochemical conversion of CO2 to C2H4 is a promising technology for high-value chemical synthesis. However, challenges arise from competing hydrogen evolution reactions (HER) and the formation of undesired C1 products. In this study, we successfully engineered palladium nanoparticles (Pd NPs) with hydrogen storage capabilities on the Cu2O interface. This strategic modification effectively controls hydrogen states at the interface, leading to simultaneous HER inhibition and a significant increase in C2H4 selectivity. Detailed insights into the reaction mechanism were obtained through in-situ infrared spectroscopy, in-situ X-ray diffraction (XRD) and controlled experiments, offering a molecular-level understanding of the reaction mechanism. The interface-modified Pd NPs provided stable *H intermediates during the reaction process, effectively suppressing HER. Furthermore, the direct bonding between Pd and Cu interfaces increases charge density at the copper sites. These copper sites, in conjunction with the Pd-H sites, activate *CO at the Pd-Cu interface, forming stable *CHO intermediates. This enhances the coupling of *CHO and *CO intermediates, resulting in a remarkable increase in the C2H4/H2 production rate from 0.4 to 2.0 after Pd NPs modification, with a high faradaic efficiency of up to 46%. Our work presents a promising approach for designing copper-based CO2 reduction catalysts with outstanding activity and selectivity.