Palladium nanoparticle–graphene nanosheet composite (PdNP–GN) is demonstrated as an efficient electrode material in energy storage applications in supercapacitors. Palladium nanoparticle (PdNP) decorated graphene nanosheet (GN) composite was synthesized via a chemical approach in a single step by the simultaneous reduction of graphene oxide (GO) and palladium chloride from the aqueous phase using ascorbic acid as reducing agent. The materials were characterized by scanning and high resolution transmission electron microscopy, Raman, X-ray diffraction and energy dispersive X-ray spectroscopy which demonstrate that the metal nanoparticles have been uniformly deposited on the surface of graphene nanosheets. The synthesized material has been analyzed by cyclic voltammetry, electrochemical impedance spectrometry and chronopotentiometry using 1M KCl as the supporting electrolyte for its application in electrochemical double layer supercapacitors. PdNPs-GN composite showed improved electron transfer kinetics and superior capacitive performance with large specific capacitance of 637Fg−1, excellent cyclic performance and maximum energy and power densities of 56 Wh kg−1 and 1166Wkg−1, respectively at a current density of 1.25Ag−1. This highlights the importance of the synergetic effects of electrochemically efficient Pd nanoparticles and graphene for energy storage applications in supercapacitors.