In this work, small palladium nanoparticles (Pd NPs) inside sulfur-doped carbon microsphere (S-CMS) were synthesized to achieve both high electro-catalytic activity and long durability for methanol oxidation reaction (MOR) in direct methanol fuel cells (DMFCs). The highly dispersed Pd NPs encapsulated in S-CMS with an architectural feature like the plum pudding model were obtained via a facile one-pot hydrothermal synthesis employing reduced glutathione (r-GSH) as both reducing and capping agents, followed by a simple carbonization procedure. The synthesized Pd NPs inside S-CMS was found to provide larger effective surface for MOR compared to commercial Pd/C. Mass activity 5.9 times higher than that of Pd/C was acquired, originating from the small size of Pd NPs and their interactions with the heteroatom-modified CMS coating. Due to the decreased agglomeration and dissolution, the proposed encapsulated Pd NPs also kept more stable during continuous start-stop operation, suggesting its great potential as an effective anode material to be used in DMFCs. (C) 2016 Elsevier Ltd. All rights reserved.