New catalysts, consisting of perylene tetracarboxylic acid functionalized graphene sheets support-enhanced electrocatalytic Pd nanoparticles (Pd/PTCA–GS), were fabricated using different reducing agents, including H2, NaBH4 and ethylene glycol (EG). The graphene sheets (GS) were functionalized via π–π stacking and hydrophobic forces. The information of the morphologies, sizes, and dispersion of Pd nanoparticles (NPs) for the as-prepared catalysts was verified by transmission electron microscopy (TEM), high-resolution transmission electron microscopy (HRTEM), Raman spectra and X-ray diffraction (XRD). As the ethanol electro-oxidation anode catalysts, the new catalysts exhibited better kinetics, higher electrocatalytic activity, better tolerance and better electrochemical stability than the Pd/GS and Pd/C, which illustrated that the new catalysts had potential applications in direct ethanol alkaline fuel cells (DEAFCs). Most attractively, the role of the chemical reduction methods (the NaBH4, EG and H2 as reducing agents) were studied systematically for the ethanol electro-oxidation anode catalysts in DEAFCs. As expected, the chemical reduction method remarkably affected the electrochemical behavior. Among all the Pd/PTCA–GS catalysts tested, Pd/PTCA–GS(NaBH4) exhibited the highest catalytic activity and stability, which may be due to the Pd NPs for Pd/PTCA–GS(NaBH4) having a narrow size distribution, uniform distribution and more perfect crystal structure than that of other as-prepared nanocomposites. These Pd/PTCA–GS are promising catalysts for developing a highly efficient direct ethanol alkaline fuel cells system for power applications.