Tailoring the interfacial sites between metals and metal oxides can be an essential tool in designing heterogeneous catalysts. These interfacial sites play a vital role in many renewable applications, for instance, catalytic CO2 reduction. Postsynthesis deposition of metal oxide on supported metal catalysts can not only create such interfacial sites but also prevent particle sintering at high temperature. Here, we report a sol–gel-based strategy to synthesize an atomically dispersed “precatalyst”. In contrast to the deposition on catalysts containing preformed nanoparticles, overcoating this material before reductive treatment can inhibit particle growth during thermal activation steps, yielding highly accessible, sintering-resistant Pd clusters that are less than 2 nm in diameter. This synthetic approach allows us to engineer interfacial sites while maintaining high metal accessibility, which was difficult to achieve in previous overcoated materials. Notably, engineering the Pd–ZrO2 interface into an inverted interface with an amorphous ZrO2 overcoat might facilitate a C–O cleavage route instead of a mechanism containing a bicarbonate intermediate during CO2 hydrogenation. We also observed that carbon deposition occurring on methanation sites could be a key factor for improving CO selectivity. Alteration of the reaction pathway, along with the deactivation of certain sites, led to 100% CO selectivity on the ZrO2@Pd/ZrO2 catalyst. This work demonstrated that overcoated materials could represent a promising class of heterogeneous catalysts for selective CO2 conversion over noble metals, which have higher rates and thermal stability compared to state-of-the-art Cu-based catalysts.