The search for efficient nontoxic catalysts able to perform industrial hydrogenations is at opic of interest, with relevance to many catalytic processes.H erein, we describe am echanistic phenomenon for the activation and spillover of hydrogen for remarkable selectivity in the semi-hydrogenation of acetylene over sub-1 nm Pd nanoclusters confined within sodalite (SOD) zeolite (Pd@SOD). Specifically,h ydrogen is dissociated on the Pd nanoclusters to form hydrogen species (i.e., hydrogen atoms and hydroxyl groups) that spill over the SOD surfaces.T he design and utilization of the small-pore zeolite SOD (six-membered rings with 0.28 0.28 nm channels) is crucial as it only allows H 2 diffusion into the channels to reacht he encapsulated Pd nanoclusters and thus avoids over-hydrogenation to form ethane.P d@SOD exhibits an ethylene selectivity of over 94.5 %, while that of conventional Pd/SOD is approximately 21.5 %.