In this article, we have discussed the biosynthesis of palladium nanoparticles (PdNPs) using aqueous Saccharomyces cerevisiae extract and its photocatalytic application. The biosynthesised PdNPs were characterised by UV-Vis spectroscopy (UV-Vis), Fourier transform infrared spectroscopy (FTIR), x-ray diffraction (XRD), scanning electron microscopy (SEM), energy dispersive spectroscopy (EDX) and Atomic force microscopy (AFM). The formation of PdNPs was confirmed from the disappearance of the peak at 405 nm in the UV-Vis spectrum. Agglomerated and hexagonal shaped PdNPs were noted by SEM. FTIR was performed to identify the biomolecules responsible for the synthesis of PdNPs. Bioactive compounds in the yeast extract acted as secondary metabolites which facilitated the formation of PdNPs. The yeast synthesised PdNPs degraded 98% of direct blue 71 dye photochemically within 60 min under UV light. © 2018 Vietnam Academy of Science & Technology.