Biomass-derived feedstock plays a crucial role in a sustainable economy due to its renewable nature, energy security, greenhouse gas reduction, waste management, and commercial prospects. A wide range of catalytic materials have been developed to make the process efficient and selective for the production of valuable chemicals. The present study focuses on the significance of surface defects, the surface oxygen vacancies (SOVs), in conjunction with Pd nanoparticles for selective biomass conversion under ambient conditions. Herein, biomass-derived furfural (FAL) is converted into furfuryl alcohol (FOL), tetrahydrofurfuryl alcohol (THFOL), and 2-methyltetrahydrofuran (2-MTHF) under ambient reaction conditions over Pd nanoparticle-supported Bi 2 MoO 6 (BMO) catalysts. The versatility of the fabricated catalyst is further explored for the selective cleavage of a lignin model ether, benzyl phenyl ether (BPE), into toluene and phenol again at room temperature. The mechanistic insights are carried out using UV−visible and Fourier transform infrared (FT-IR) adsorption experiments, demonstrating the improvement in the reactant's adsorption after an enhancement in the number of SOVs. Furthermore, the impact of the reaction medium on the adsorption strength and mode of adsorption was also rationalized based on adsorption and controlled experimental studies. The X-ray photoelectron (XPS), Raman, and electron paramagnetic resonance (EPR) spectroscopic studies reveal an enhancement in SOVs of BMO after its treatment with NaBH 4 , which was used for Pd nanoparticle deposition over the BMO surface. Further study using XPS and transmission electron microscopy (TEM) shows that the support is critical in regulating the concentration of Pd 0 species and the size of Pd nanoparticles. In brief, the present research aims to demonstrate how the induction of surface defects in metal oxides can enhance the efficiency of biomass processing.