A green synthesis process in water has been developed with the aid of Ocimun sanctum (tulsi) leaf extract for the production of Pd nanoparticles (NPs) supported on modified montmorillonite. The leaf extract serves as a mild, natural and non-toxic reducing agent for converting the K₂[PdCl₄] to Pd NPs. The synthesized Pd NPs were characterized by using PXRD, SEM, TEM, EDX, XPS, H₂-TPR and surface area analysis. TEM analysis reveals that particle sizes of the Pd NPs lie between a minimum of 10 nm and a maximum of 80 nm. The supported Pd NPs are used in the catalytic hydrodechlorination of toxic pollutant, 4-chlorophenol in water under base free conditions and showed conversion up to 98%. The catalyst is recoverable by filtration and could be recycled for several runs without any significant loss of catalytic efficiency.