Optimization of size, loading and chemical composition of catalytic nanoparticles is a crucial step to achieve cost‐effective and efficient (electro) catalysts. This report elaborates optimization of palladium (Pd) nanoparticle size and loading on the electrospun based N‐doped carbon nanofibers (nCNF) towards oxygen reduction reaction (ORR) for the energy devices like fuel cell, metal air batteries. Electrospinning was utilized to produce one‐dimensional (1D) polyacrylonitrile nanofibers followed by a two‐step carbonization process obtaining well‐defined conductive nCNF having diameters in the range of 200–350 nm. As‐synthesized nCNF was decorated with discrete Pd nanoparticles ranging from 2.6±0.4 nm to 4.7±0.5 nm via thermal atomic layer deposition (ALD) technique. We found that nCNF deposited Pd nanoparticles having 3.9±0.6 nm size (Pd20/nCNF) showed the best ORR activity with the smallest Tafel slope of 58 mV dec−1 along with four electrons involved in the ORR. In addition, high value at half wave potential (E1/2=806 mV vs. RHE) and exchange current densities (i0=6.998 mA cm−2) at Pd20/nCNF makes it efficient catalyst among other Pd decorated nCNF. Moreover, we found that electrocatalyst with lower loading/density of Pd nanoparticles showed enhanced ORR activity.