Development of general and simple designs of catalytic electrodes for the hydrogen evolution reaction (HER) is critical. The present work demonstrates the multiple roles played by a hydrogel polymer in the fabrication and activity enhancement of the nanoelectrocatalyst. A nanocomposite thin film of Pd with the insulating hydrogel, poly(2‐hydroxyethyl methacrylate) (PHEMA), is fabricated through a facile in situ process, the polymer itself functioning as the reducing/stabilizing agent in the formation of Pd nanoparticles. Pd‐PHEMA on Ni foam enables efficient HER in alkaline medium with a low overpotential; the polymer enables the electrocatalysis by its swelling and confinement of the electrolyte. Most significantly, when the electrode is subjected to an optimized cycling protocol, the overpotential decreases steadily, reaching an impressively low value of 36 mV (@10 mA cm‐2). A low Tafel slope (68 mV dec‐1), high exchange current density, Faradaic efficiency and TOF (3.27 mA cm‐2, 99%, 122.7 h‐1), and extended stability are achieved. Detailed investigations reveal the active role of the polymer in the evolution of the nanocatalyst, itself undergoing favorable morphological changes. The study illustrates the widened scope for developing efficient and stable catalytic electrodes with hydrogel polymers and unique features that promote the generation of green hydrogen.