Development of novel materials and methodologies for removal of toxic and poisonous carbon monoxide (CO) gas is important to solve serious health and environmental related problems. Existing materials used for the removal of CO gas are quite expensive and therefore, the synthesis of low‐cost and earth‐abundant catalyst for CO oxidation is urgently needed. In the present work, we report the preparation of Pd nanoparticles loaded on porous carbon supports from the spent Pd/C and the subsequent catalytic oxidation of CO. Different Pd based catalysts are prepared by using various reducing agents with different reduction potential such as formaldehyde, green tea, ascorbic acid, and sodium borohydride. The prepared catalysts are characterized and employed for the oxidation of CO. All the prepared catalysts show excellent activity towards CO oxidation at room temperature either in presence or absence of moisture depending on the Pd0/Pd+2 ratio in Pd/C which follows the order Pd/C−NaBH4>Pd/C−HCHO>Pd/C−Ascorbic acid>Pd/C−Green tea. Experimental findings of the present work also reveal that depending on the oxidation state, and moisture plays a critical role in Pd catalytic properties on the oxidation of CO. Theoretical calculations performed using Vienna ab initio Simulation Package (VASP) support the experimental observations and further confirm that the reaction proceeds through Langmuir‐Hinshelwood mechanism.