Abstract Conversion of carbon dioxide (CO 2 ) into fuels and chemicals by electroreduction has attracted significant interest, although it suffers from a large overpotential and low selectivity. A Pd‐Sn alloy electrocatalyst was developed for the exclusive conversion of CO 2 into formic acid in an aqueous solution. This catalyst showed a nearly perfect faradaic efficiency toward formic acid formation at the very low overpotential of −0.26 V, where both CO formation and hydrogen evolution were completely suppressed. Density functional theory (DFT) calculations suggested that the formation of the key reaction intermediate HCOO* as well as the product formic acid was the most favorable over the Pd‐Sn alloy catalyst surface with an atomic composition of PdSnO 2 , consistent with experiments.