The hydrodehalogenation (HDH) of halophenols is efficiently catalyzed by palladium supported on high-surface ceria (Pd/CeO2) under mild conditions (35 °C, 1 atm H2). A combination of NMR, diffuse reflectance infrared Fourier transform spectroscopy, Raman spectroscopy, and XPS studies and HDH kinetics of substituted halobenzenes suggests that the reaction proceeds mainly via a sequence of dissociative adsorption of phenolic hydroxyl onto the support, oxidative addition of the C–halogen bond to Pd, and reductive elimination to give phenol and hydrogen halide. The dissociative adsorption of the −OH group onto oxygen vacancies of the ceria support results in an electron-rich intermediate that facilitates the turnover-limiting reductive elimination step. In contrast, the direct pathway catalyzed by Pd without dissociative adsorption of the reactants on the support takes place at a slower rate. The mechanistic insights gained in this study were used to modify the reaction conditions for enabling HDH of recalcitrant halides such as fluorides and iodides.