Rocky asteroids and planets display nucleosynthetic isotope variations that are attributed to the heterogeneous distribution of stardust from different stellar sources in the solar protoplanetary disk. Here we report new high precision palladium isotope data for six iron meteorite groups, which display smaller nucleosynthetic isotope variations than the more refractory neighbouring elements. Based on this observation we present a new model in which thermal destruction of interstellar medium dust results in an enrichment of s-process dominated stardust in regions closer to the Sun. We propose that stardust is depleted in volatile elements due to incomplete condensation of these elements into dust around asymptotic giant branch (AGB) stars. This led to the smaller nucleosynthetic variations for Pd reported here and the lack of such variations for more volatile elements. The smaller magnitude variations measured in heavier refractory elements suggest that material from high-metallicity AGB stars dominated stardust in the Solar System. These stars produce less heavy s-process elements (Z ≥ 56) compared to the bulk Solar System composition.The protoplanetary disk from which our Solar System formed incorporated dust that was inherited from the collapsing molecular cloud. A few per cent of this dust formed around stars with active nucleosynthesis and retained the extreme isotopic fingerprint of its formation environment 1,2 . This dust, which is isotopically anomalous compared to Solar System compositions, is here termed stardust. However, it is often also referred to as presolar grains when found in meteorites. Most stardust in primitive meteorites originates from asymptotic giant branch (AGB) stars, the site of s-process nucleosynthesis, with only small contributions from supernovae environments 3 . The majority of the dust in the solar protoplanetary disk grew in the interstellar medium (ISM) from a well-mixed gas phase as mantles on pre-existing nuclei. These mantles likely inherited the composition of the local ISM, i.e., a near solar isotopic composition 1 .Nucleosynthetic isotope variations, relative to Earth, are well established for a range of elements in bulk meteorites 4 . These variations mostly reflect the heterogeneous distribution of isotopically distinct dust in the protoplanetary disk. It is generally thought that this heterogeneity was established, at least in part, due to processes occurring in the protoplanetary disk itself. Physical sorting of grains, either by mineralogical type 5 or size 6 , and selective destruction of stardust by thermal processing in the protoplanetary disk 7-9 or by aqueous alteration on parent bodies 10 , have all been proposed as possible mechanisms to generate isotope heterogeneity. While these individual processes can explain nucleosynthetic variations for specific elements, it is debated whether a unifying explanation for all elemental trends exists 11 . Therefore, considerable uncertainty remains as to which processes were important for dust processing in the protoplanet...