Plasma technologies have been widely used for various catalyst preparation in recent years. The plasma combined with a spouted bed reactor can provide homogeneous particle treatment and make gas temperature high enough to treat particles. In this work, a combination of microwave induced plasma and spouted bed was proposed and applied for the catalyst preparation. As a model catalyst, Pd/Al₂O₃ was prepared by the plasma spouted bed with various operating conditions and the selective hydrogenation of acetylene to ethylene was chosen to evaluate their catalytic activity. Catalyst characterizations were carried out by SEM, XRD, TEM, and H₂ chemisorption to elucidate the effects of the plasma spouted bed. Despite the short treatment time, Pd/Al₂O₃ was successfully produced using the plasma spouted bed. For comparison, the conventional heating process with an electric furnace was used to prepare Pd/Al₂O₃. For the plasma spouted bed treatment, it had contrary effect from the conventional method. The average diameter of Pd nanoparticles of PS-4 was smaller than that of CM-500 despite high temperature condition in the plasma spouted bed. It is suggested that Pd/Al₂O₃ catalyst prepared by the plasma spouted bed showed different catalytic reaction behavior with the conventional method.