Ethylene dimerization is an industrial process that is currently carried out using homogeneous catalysts. Here we present a highly active heterogeneous catalyst containing minute amounts of atomically dispersed Pd. It requires no co‐catalyst(s) or activator(s) and significantly outperforms previously reported catalysts tested under similar reaction conditions. The selectivity to C4‐ and C6‐hydrocarbons was about 80% and 10% at 42% ethylene conversion at 200°C using an industrially relevant feed containing 50 vol% ethylene, respectively. Our kinetic and catalyst characterization experiments complemented by density functional theory calculations provide molecular insights into the local environment of isolated Pd(II)Ox species and their role in achieving high activity in the target reaction. When the developed catalyst was rationally integrated with a Mo‐containing olefin metathesis catalyst in the same reactor, the formed butenes reacted with ethylene to propylene with a selectivity of 98% at about 24% ethylene conversion.