Palladium hydrides (PdHx) are pivotal in both fundamental research and practical applications across a wide spectrum. PdHx nanocrystals, synthesized by heating in dimethylformamide (DMF), exhibit remarkable stability, granting them widespread applications in the field of electrocatalysis. However, this stability appears inconsistent with their metastable nature. The substantial challenges in characterizing nanoscale structures contribute to the limited understanding of this anomalous phenomenon. Here, through a series of well-conceived experimental designs and advanced characterization techniques, including aberration-corrected scanning transmission electron microscopy (AC-STEM), in situ X-ray diffraction (XRD), and time-of-flight secondary ion mass spectrometry (TOF-SIMS), we have uncovered evidence that indicates the presence of C and N within the lattice of Pd (PdCxNy), rather than H (PdHx). By combining theoretical calculations, we have thoroughly studied the potential configurations and thermodynamic stability of PdCxNy, demonstrating a 2.5:1 ratio of C to N infiltration into the Pd lattice. Furthermore, we successfully modulated the electronic structure of Pd nanocrystals through C and N doping, enhancing their catalytic activity in methanol oxidation reactions. This breakthrough provides a new perspective on the structure and composition of Pd-based nanocrystals infused with light elements, paving the way for the development of advanced catalytic materials in the future.