Ligand-modified palladium nanoparticles deposited on a carbon carrier efficiently catalyze the direct synthesis of H₂O₂ and the unique performance is due to their hybrid nanostructure. Catalytic testing demonstrated that the selectivity increases with the HHDMA ligand content from 10 % for naked nanoparticles up to 80 %, rivalling that obtained with state-of-the-art bimetallic catalysts (HHDMA=C₂₀H₄₆NO₅P). Furthermore, it remains stable over five consecutive reaction runs owing to the high resistance towards leaching of the organic moiety, arising from its bond with the metal surface. As rationalized by density functional theory, this behavior is attributed to the adsorption mode of the reaction intermediates on the metal surface. Whereas they lie flat in the absence of the organic shell, their electrostatic interaction with the ligand result in a unique vertical configuration which prevents further dissociation and over-hydrogenation. These findings demonstrate the importance of understanding substrate–ligand interactions in capped nanoparticles to develop smart catalysts for the sustainable manufacture of hydrogen peroxide.