Mesoporous ZnO was synthesized through the sol-gel method in the presence of triblock co-polymer Pluronic (F-127) template as the structure directing agent. Palladium nanoparticles were photochemically reduced and deposited onto mesoporous ZnO to obtain 1 wt.% Pd/ZnO nanocomposite. Structural and morphological analysis revealed high homogeneity and monodispersity of Pd nanoclusters with small particle sizes ∼ 2–5 nm onto mesoporous ZnO. The electrochemical detection of ethanol in aqueous solutions was conducted at the newly developed Pd/ZnO modified glassy carbon electrode (GCE) by the current-potential (IV) and cyclic voltammetry (CV) techniques and compared with bare GCE or pure ZnO. The presence of Pd dopant greatly enhances the sensitivity of ZnO, and the obtained mesoporous Pd/ZnO sensor has an excellent performance for precision detection of ethanol in aqueous solution with low concentration. The sensitivity was found to be 33.08 μAcm−2 mM−1 at lower concentration zone (0.05–0.8 mM) and 2.13 μAcm−2 mM−1 at higher concentration zone (0.8–12 mM), with a limit of detection (LOD) 19.2 μM. The kinetics study of ethanol oxidation revealed a characteristic feature for a mixed surface and diffusion-controlled process. These excellent sensing characteristics make the mesoporous Pd/ZnO nanocomposite a good candidate for the production of high-performance electrochemical sensors at low ethanol concentration in aqueous solution.