Smectite clay was employed as templated matrix to prepare subnanoscale Pd-0/Fe-0 particles, and their components as well as intercalated architectures were well characterized by X-ray energy dispersive spectroscopy (X-EDS) and X-ray diffraction (XRD). Furthermore, as-prepared Pd-0/Fe-0 subnanoscale nanoparticles were evaluated for their dechlorination effect using chlorinated phenols as model molecules. As a result, pentachlorophenol (PCP) is selectively transformed to phenol in a stepwise dechlorination pathway within 6 h, and the dechlorination rate constants show linearly relationship with contents of Pd as its loadings <0.065%. Comparing with PCP, other chlorinated phenols display similar degradation pattern but within much shorter time frame. The dechlorination rate of chlorinated phenols increases with decreasing in number of -Cl attached to aromatic ring, which can be predicted by the total charge of the aromatic ring, exhibiting an inversely linear relationship with the dechlorination rates. While the selectivity of dechlorination depends on the charges associated with the individual aromatic carbon. Chloro-functional groups at the ortho-position are easier to be dechlorinated than that at meta- and para- positions yielding primarily 3,4,5-TCP as intermediate from PCP, further to phenol. The effective dechlorination warrants their potential utilizations in development of in-situ remediation technologies for organic pollutants in contaminated water.