The mm-sized capsule catalyst Co/SiO 2 -Z with the H-type zeolite (HZSM-5) as the shell, and the Co/SiO 2 -Z-Sp-Pd capsule catalyst with Pd loaded by sputtering method, as well as the Co/SiO 2 -Z-IW-Pd capsule catalyst, loading the Pd by incipient wetness impregnation, were prepared and used for isoparaffin direct synthesis by Fischer–Tropsch synthesis reaction from syngas with H 2 /CO ratio of 2/1 at 1.0MPa and 533K. The analysis results of XRD, SEM, EDS and NH 3 -TPD showed that a compact HZSM-5 shell was formed on the Co/SiO 2 pellet, and the metallic Pd was well sputtered on the surface of the HZSM-5 shell for the Co/SiO 2 -Z-Sp-Pd catalyst. The isoparaffin and olefin selectivity increased in the FTS reactions on the HZSM-5 capsule catalyst than on the Co/SiO 2 catalyst. The selectivity of isoparaffins increased, and the selectivity of olefins decreased when using the Co/SiO 2 -Z-Sp-Pd catalyst, compared with the Co/SiO 2 -Z catalyst or the Co/SiO 2 -Z-IW-Pd catalyst, because metallic Pd introduced by sputtering on the zeolite shell could hydrogenate olefins efficiently. It was suitable to use the sputtering method for the preparation of the zeolite capsule catalyst loaded with metallic Pd, as conventional impregnation method could not reduce Pd cation due to the strong interaction from zeolite surface. The CO conversion, CH 4 and CO 2 selectivity on the catalyst of Co/SiO 2 -Z-Sp-Pd increased with temperature increasing from 513K to 553K. At elevated temperature, the isoparaffin selectivity also increased while the olefin selectivity was suppressed.