PdZn alloy nanoparticles encapsulated within a few layers of graphene supported on ZnO nanowires (PdZn@C/ZnO) exhibit enhanced catalytic performance and robust long-term stability in semi-hydrogenation of acetylene to ethylene. The enhanced ethylene selectivity of PdZn@C/ZnO originates from the confining environment of the graphene cover, which can promote desorption of ethylene from the PdZn surface, avoiding the over-hydrogenation of ethylene to ethane.