A Pd-In/SiO2 catalyst was prepared by the wet impregnation method and used for CO2 reduction at atmospheric pressure. The catalyst was shown to have 100% selectivity toward CO with no detectable CH4 formation. In order to understand the high CO selectivity of Pd-In/SiO2, a detailed catalyst characterization in combination with the DFT study was conducted and compared with that over the Pd/SiO2 catalyst. The XRD and TEM analyses indicate the formation of the PdIn bimetallic nanoparticles on Pd-In/SiO2 after H-2 reduction. The unique catalytic property of Pd-In/SiO2 was attributed to the formation of the bimetallic particles. Characterizations including H-2 chemisorption and DRIFT and DFT modeling show that the formation of PdIn bimetallic nanoparticles reduces the activity toward H-2 dissociative adsorption, weakens CO binding on the surface and increases the barrier of CO hydrogenation, suppressing the further hydrogenation beyond CO. (C) 2015 Elsevier Ltd. All rights reserved.