The slow decomposition kinetics of Li2O2 and the accumulation of by-products resulted in the passivation of cathode is one of the key issues restricting the development of Li-O2 batteries. Herein, ultrafine Pd nanoparticles (with an average particle size of 2.23 nm) capped by mercaptosuccinic acid (MSA) dispersed in 1.0 M LiClO4/DMSO as colloidal electrolyte was applied in Li-O2 batteries. The highly dispersed Pd NPs can promote the formation of film-like Li2O2 instead of large crystal by adsorbing the discharge intermediate (O2?), and co-deposit with discharge products, which increase the conductivity andaccelerate the decomposition kinetics of discharge products, moreover, alleviating the Li anode corrosion. By using 1.0 M LiClO4/DMSO/Pd (0.5 mg mL?1 of Pd NPs) colloidal electrolyte, the discharge capacity increased from 8260 mA g?1 to11,760 mA g?1, the cycle life of Li-O2 batteries extended to 212 rounds, which was about 5 times as many as that withLiClO4/DMSO electrolyte (44 rounds), and the rate performance was also improved.