Current chemical recycling of bulk synthetic plastic, polyethylene (PE), operates at high temperature/pressure and yields a complex mixture of products. PE conversion under mild conditions and with good selectivity toward value-added chemicals remains a practical challenge. Here, we demonstrate an atomic engineering strategy to modify a TiO
2
photocatalyst with reversible Pd species for the selective conversion of PE to ethylene (C
2
H
4
) and propionic acid via dicarboxylic acid intermediates under moderate conditions. TiO
2
-supported atomically dispersed Pd species exhibits C
2
H
4
evolution of 531.2 μmol g
cat
−1
hour
−1
, 408 times that of pristine TiO
2
. The liquid product is a valuable chemical propanoic acid with 98.8% selectivity. Plastic conversion with a C
2
hydrocarbon yield of 0.9% and a propionic acid yield of 6.3% was achieved in oxidation coupled with 3 hours of photoreaction. In situ spectroscopic studies confirm a dual role of atomic Pd species: an electron acceptor to boost charge separation/transfer for efficient photoredox, and a mediator to stabilize reaction intermediates for selective decarboxylation.