The use of water-dispersible and sustainable Pd nanocatalysts to reduce toxic heavy metal ions and catalyze important organic reactions has profound significance for the environmental remediation and the catalytic industry. In this work, a novel water-dispersible and recyclable Pd@LNPs nanoreactor composed of Pd nanoparticle cluster core and LNPs shell was developed in microwave reactor in aqueous solution. It turned out that Pd nanoparticles grew uniformly and stably inside LNPs nanosphere due to the coordinated binding and interaction between Pd and the functional groups in LNPs, which was significantly different from surface loading. The green and biodegradable LNPs nanospheres are not only used as reducing agents for Pd (II) and nanocarriers, but also act as individual nanocontainers to provide favorable sites for reactions and effectively control the entry and release of reactants and products. Furthermore, the excellent and efficient catalytic properties of Pd@LNPs were exhibited by Csingle bondC coupling reactions and the reduction of Cr(VI) and 4-nitrophenol. The Pd@LNPs prepared in this study have the advantages of excellent dispersion, great recyclability, high turnover frequency and better green sustainability metrics. It will have a great significance for the development of the potential high-value of lignin and the progress in the field of bio-nanocatalysts.