Diatomic catalysts (DACs) present unique opportunities for harnessing ensemble effects between adjacent metal atoms, thus, expanding the properties of single-atom catalysts (SACs). However, the precise preparation and characterization of this type of catalyst remains challenging. Following a precursor-preselected strategy, here, we report the synthesis of a carbon nitride-supported Pd-DAC, which achieves an excellent yield of 92% for photocatalytic water-donating transfer hydrogenation of 4-vinylphenol to 4-ethylphenol, far exceeding that of other metal species, including Pd single atoms (47%) and nanoparticles (1%). Combining transmission electron microscopy with standardized machine learning atom-detection methods confirms the stabilization of a substantial fraction of dimeric Pd species over carbon nitride. Density functional theory (DFT) simulations associate the outstanding performance of Pd-DAC to enhanced substrate activation in the hydrogenation path compared to Pd-SAC. The work provides criteria for DACs characterization and demonstrates a transfer hydrogenation application that is sustainable and eco-friendly over conventional hydrogenation technologies.