Palacio is a Basque surname. Notable people with the surname include:
Alberto Palacio, engineer
Alfredo Palacio, former president of Ecuador
Andy Palacio, Belizean musician
Emilio Palacio, Ecuadorian journalist
Ernesto Palacio, opera singer
Héctor Palacio, Colombian road racing cyclist
Milt Palacio, basketball player
Rodrigo Palacio, footballer
R. J. Palacio, American writer of the 2012 children's novel Wonder