A high surface acidic ZrO2 nanoparticle was prepared using glucose as a non-toxic reducing agent. Palladium (Pd) nanoparticles in the range of 1–2 nm are grafted in in-situ as well as ex-situ via urea deposition over pre-synthesized ZrO2 nanoparticles. Both methods are found to be useful for the one-pot transformation of glucose to HMF, and their catalytic activities towards selective production of HMF are found to be strongly dependent on the particle size and nature of acidic sites. A linear-type activity trend is observed with Pd loading in reference to the HMF selectivity and presents the best catalytic performance. The activation energy and turnover frequency (TOF) of the 1–2 nm NP catalyst are further calculated to be 44.1 kJ mol−1 and 6.011 molHMF·molPd−1·h−1, respectively. Characterization of the spent catalysts indicates that smaller-sized NPs face severe agglomeration, resulting in poor stability and activity. Hence, the high catalytic performance can be attributed to the balance between Brønsted and Lewis acid sites, in combination with Pd species intrinsic activity. Due to their improved activity and stability, 2Pd–ZrO2in-situ exhibits 55% glucose conversion with 74.0% of HMF selectivity after 3h of reaction at 160 °C.