Low-loading Pd supported on Fe2O3 nanoparticles was synthesized. A common nanocatalyst system with previously reported synergistic enhancement of reactivity that is attributed to the electronic interactions between Pd and the Fe2O3 support. Fe2O3-selective precoalescence overcoating with ZnO atomic layer deposition (ALD), using Zn(CH2CH3)2 and H2O as precursors, dampens competitive hydrogenation reactivity at Fe2O3-based sites. The result is enhanced efficiency at the low-loading but high reactivity Pd sites. While this increases catalyst efficiency toward most aqueous redox reactions tested, it suppresses reactivity toward polyaromatic core substrates. X-ray photoelectron spectroscopy (XPS) and ultraviolet photoelectron spectroscopy (UPS) show minimal electronic impacts for the ZnO overcoat on the Pd particles, implying a predominantly physical site blocking effect as the reason for the modified reactivity. This serves as a proof-of-concept of not only stabilizing supported nanocatalysts but also altering reactivity with ultrathin ALD overcoats. The results point to a facile ALD route for selective enhancement of reactivity for low-loading Pd-based supported nanocatalysts.