In this work, CeO2-modified Pd/CeO2-carbon nanotube (CNT) electrocatalyst for the electro-oxidation of formic acid has been investigated. The support CNT was first modified with different amounts (5–30 wt.%) of CeO2 using a precipitation-deposition method. The electrocatalysts were developed by dispersing Pd on the CeO2-CNT supports using the borohydride reduction method. The synthesized electrocatalysts were analyzed for composition, morphology and electronic structure using x-ray diffraction (XRD), scanning electron microscopy with energy-dispersive x-ray spectroscopy (SEM/EDX), transmission electron microscopy (TEM), x-ray photoelectron spectroscopy (XPS), and thermogravimetric analysis (TGA) techniques. The formation of Pd nanoparticles on the CeO2-CNT support was confirmed using TEM. The activity of Pd/CeO2-CNT and of Pd-CNT samples upon oxidation of formic acid was evaluated by using carbon monoxide stripping voltammetry, cyclic voltammetry, and chronoamperometry. The addition of moderate amounts of cerium oxide (up to 10 wt.%) significantly improved the activity of Pd/CeO2-CNT compared to the unmodified Pd-CNT. Pd/10 wt.% CeO2-CNT showed a current density of 2 A mg−1, which is ten times higher than that of the unmodified Pd-CNT (0.2 A mg−1). Similarly, the power density obtained for Pd/10 wt.% CeO2-CNT in an air-breathing formic acid fuel cell was 6.8 mW/cm2 which is two times higher than Pd-CNT (3.2 mW/cm2), thus exhibiting the promotional effects of CeO2 to Pd/CeO2-CNT. A plausible justification for the improved catalytic performance and stability is provided in the light of the physical characterization results.