We studied the effect of Pd on the adsorption of CO on the C40 nano capsule. The calculations of the geometry and electronic structure were performed using Gaussian 09 at spin unrestricted DFT wave functions (B3LYP) level with 6-311G* basis set. The most stable adsorption sites are those with the C atom bonded to Pd, on a tilted configuration, near a Pd top position. In this case the C−O distance increases producing a weakening of the bond and the calculated stretching frequency decreases when compared with the isolated molecule. The gas phase experimental study of this molecule found Pd-C and C O distances of 1.845 A˚ and 1.137 A˚, respectively [1]. Our results (dPd−C = 1.867 and dC−O = 1.138 A) are close to their calculations. Also the CO molecule withdraws charge from the surface, resulting a negatively charged molecule. It was found that Pd doping can enhance CO adsorption.