A series of modified carbon nitride with a controlled amount of carbon vacancies is prepared successfully by simple acid treatment, and the performances of the corresponding Pd/CN-X catalysts in phenol-selective hydrogenation are investigated. It is found that the Pd/CN-30 catalyst exhibits the highest activity, while Pd/CN-60 shows a very low activity. The characterization of powder X-ray diffraction, transmission electron microscopy, X-ray photoelectron spectra, temperature-programmed desorption of phenol and cyclohexanone, phenol adsorption experiments, and isotope experiment show that the high catalytic activities and selectivity of Pd/CN-30 are related to its relatively high Pd dispersity, high phenol adsorption capacity, and proper hydrophilicity. However, the much lower activity of Pd/CN-60 can be attributed to the existence of competitive adsorption of phenol and water molecules on the catalyst surface and its low hydrogen activation ability due to the support over modification that results in the much stronger hydrophilicity and the near atomic Pd dispersion. In addition, the stability of Pd/CN-X is positively correlated with the carbon vacancy contents due to the strong interaction between the Pd species and the support.