An argon glow discharge plasma approach was employed to reduce PdCl2 supported on γ-Al2O3 at ambient temperature. This environmentally benign reduction approach is energy efficient and economically effective. Characterizations using X-ray powder diffraction (XRD), transmission electron microscopy (TEM) and energy dispersive X-ray spectrometer (EDX) confirmed that the ionic Pd could be effectively reduced to the metallic state during this room temperature plasma reduction. The activities of the plasma reduced catalysts were tested for selective oxidation of glucose to gluconic acid with conventional hydrogen reduced catalysts as comparison. The plasma reduced catalyst followed by calcination under argon atmosphere at 500 °C exhibits a higher activity than the hydrogen thermally reduced one. Furthermore, the high stability against leaching of active metal into the reaction medium, observed in the plasma reduced catalysts, is of importance in the potential industrial application.