Pd/C catalysts consisted of Pd nanoparticles (NPs) on carbon support are an important electrocatalyst in fuel cells operating on small molecules such as formic acid, methanol, and ethanol. Enhancing the performance and durability of Pd/C catalyst is an urgent issue for the commercialization of such fuel cells. Towards these ends, in this work, we report a facile sonochemical method to form a novel Pd/CeO2/C catalyst with a CeO2 undercoating layer between Pd NPs and carbon support. The CeO2 undercoating layer is composed of ~6 nm sized CeO2−x (x ~ 0.17) NPs densely covering the carbon surface. The Pd NPs in Pd/CeO2/C catalyst are formed on top of the CeO2 NPs. Spectroscopic and electrochemical analysis data indicate the presence of strong metal-support interaction (SMSI) effect between Pd and CeO2. Formic acid oxidation reaction (FAOR), studied as an exemplary reaction of electrocatalysis on Pd/CeO2/C catalyst, is enhanced from that of Pd/C catalyst by 2.4 times for specific activity and 4.8 times for mass activity. Pd/CeO2/C catalyst shows ~70% of retention of mass activity after 1000 cycles of FAO reaction, much higher than ~29% of Pd/C.