The green synthesis of palladium nanoparticles (Pd NPs) for catalysis and biological applications has been gaining great interest. To replace complex plant extracts, lentinan (LNT) may be a good reducing and stabilizing agent. In this work, a simple and green method using LNT to reduce and stabilize palladium Pd NPs was verified. The resulting LNT stabilized palladium nanoparticles (Pd_n-LNT NPs) were characterized by UV-Vis spectroscopy, DLS, TEM, and XPS. The results indicated that Pd NPs inside of Pd_n-LNT NPs had a small size (2.35–3.32 nm). Pd_n-LNT NPs were stable in solution for 7 days. In addition, Pd_n-LNT NPs had higher catalytic activity towards the reduction of 4-nitrophenol than other catalysts. More importantly, Pd_n-LNT NPs had negligible cytotoxicity towards cells and showed good antioxidant activity. Taken together, the prepared Pd_n-LNT NPs have great potential bio-related applications.