Herein, we report on the synthesis of ultrasmall Pd nanoclusters (∼2 nm) protected by L‐cysteine [HOCOCH(NH2)CH2SH] ligands (Pdn(L‐Cys)m) and supported on the surfaces of CeO2, TiO2, Fe3O4, and ZnO nanoparticles for CO catalytic oxidation. The Pdn(L‐Cys)m nanoclusters supported on the reducible metal oxides CeO2, TiO2 and Fe3O4 exhibit a remarkable catalytic activity towards CO oxidation, significantly higher than the reported Pd nanoparticle catalysts. The high catalytic activity of the ligand‐protected clusters Pdn(L‐Cys)m is observed on the three reducible oxides where 100 % CO conversion occurs at 93–110 °C. The high activity is attributed to the ligand‐protected Pd nanoclusters where the L‐cysteine ligands aid in achieving monodispersity of the Pd clusters by limiting the cluster size to the active sub‐2‐nm region and decreasing the tendency of the clusters for agglomeration. In the case of the ceria support, a complete removal of the L‐cysteine ligands results in connected agglomerated Pd clusters which are less reactive than the ligand‐protected clusters. However, for the TiO2 and Fe3O4 supports, complete removal of the ligands from the Pdn(L‐Cys)m clusters leads to a slight decrease in activity where the T100% CO conversion occurs at 99 °C and 107 °C, respectively. The high porosity of the TiO2 and Fe3O4 supports appears to aid in efficient encapsulation of the bare Pdn nanoclusters within the mesoporous pores of the support.