A novel magnetic microspherical catalyst support with enough mechanical strength was prepared through coating Al2O3 on a magnetic core of NiFe2O4 spinel ferrite using the oil drop method to synthesize magnetic Pd‐supported catalyst for acetylene hydrogenation reaction. The synthesized core–shell composite Pd/Al2O3 catalyst shows high surface area and pore volume as well as sufficient saturated magnetization property, characterized by powder X‐ray diffraction, low‐temperature N2 adsorption–desorption analysis, and magnetic measurements. Catalytic performance of this magnetic Pd/Al2O3 catalyst was measured for acetylene hydrogenation reaction in a magnetically stabilized bed (MSB) reactor under different operation conditions. Under the optimal conditions of 353 K, 1.5 MPa and a gas hourly space velocity of 12,000 h−1, C2H2 conversion and C2H4 selectivity approximated 100% and 84%, respectively, over this magnetic Pd/Al2O3 catalyst in the MSB reactor, as a control over the commercial catalyst for hydrogenation reaction C2H2 conversion and C2H4 selectivity was near 37 and 64% under the similar conditions. Significant improvement of acetylene hydrogenation processes over this novel magnetic catalyst enlightens us a promising route to explore process intensification techniques through MSB. © 2008 American Institute of Chemical Engineers AIChE J, 2008