The present study investigated catalytic properties of palladium nanoparticles for hydrogenation of carbon dioxide into formic acid and effect of silica-coating on the palladium nanoparticles to maintain stability of the nanoparticles. The nanoparticles were obtained from palladium nitrate dissolved in methyl alcohol solvent under solvothermal conditions, and the activity for the hydrogenation reaction was evaluated under various reaction conditions. Reaction pressure influenced turnover number (TON) of the nanoparticles for hydrogenation of carbon dioxide into formic acid, and the TON significantly decreased with increasing reaction time under high reaction pressure. UV-Vis spectra of the solution after the hydrogenation reaction indicated that larger amount of active palladium species dissolved in the reaction solution under higher reaction pressure. In order to prevent the active palladium species from dissolving into the reaction solution, we investigated effect of silica coating on the palladium nanoparticles. Thicknesses of silica coated on the nanoparticles by sol-gel based method were controlled by adjusting amount of tetraethoxysilane (TEOS) using as the silica source, and addition of appropriate amount of silica was effective to prevent the active palladium species from dissolving into the reaction solution during the hydrogenation reaction. In addition, the silica coated catalyst possessed good recycle ability for the hydrogenation reaction.