Dye wastewater severely threatens the environment due to its hazardous and toxic effects. Although many methods are available to degrade dyes, most of them are far from satisfactory. The proposed research provides a green and sustainable approach to degrade an azo dye, methyl orange, by electrically active biofilms (EABs) in the presence of solid and hollow palladium (Pd) nanoparticles. The EABs acted as the electron generator while nanoparticles functioned as the electron carrier agents to enhance degradation rate of the dye by breaking the kinetic barrier. The hollow Pd nanoparticles showed better performance than the solid Pd nanoparticles on the dye degradation, possibly due to high specific surface area and cage effect. The hollow cavities provided by the nanoparticles acted as the reaction centers for the dye degradation.