Pd/C catalyst was used to eliminate chlorine compacted in shellac while it was being bleached with sodium hypochlorite in alkaline solution for the preparation of shellac with low chlorine content, a natural and biological product used in large scale in food industry and pharmaceutical fields. Experiments demonstrated that the Pd/C could catalyze dechlorination process effectively, which was affected by several factors such as reaction temperature, Pd/C ratio, and the induction of Pd/C catalyst, and that the dechlorination efficiency reached 88.2% under the optimal conditions of Pd/C loading ratio of 1.0% (mass), catalyst usage 12 g/L, H2 flowing rate 50 mL/min, and reaction temperature 90 for 120 min. Moreover, the mechanism of catalytic hydrogenation was elucidated through structure characterization of the final products using elementary analysis, and ultraviolet spectrophotometer. It was shown from the result of ultraviolet spectrophotometer that the wavelength of the maximum absorption of seedlac, the raw materials for obtaining shellac, was 235 nm. However, it was blue shifted to the same scope 220~225 nm when the shellac was dechlorinated by catalytic hydrogenation with Pd/C as the shellac without catalyzed. The big difference of wavelength of the maximum absorption between shellac and seedlac was due to that there was a lot of compacted chlorine in the shellac, while the little difference of wavelength of the maximum absorption between the shellac and the low chlorine shellac was due to that chlorine could not be eliminated completely. The results of elementary analysis showed that chlorine content in the final product was only 0.30% under the optimum conditions, compared to shellac it was just 1/9 of that of the product without declorination by catalytic hydrogenation. It was shown from the mechanism analysis that the dechlorination reaction took place mainly on the active surface sites of Pd/C, and chlorine ions compacted in the shellac was substituted by hydrogen ions.