Palacio is a Basque surname. Notable people with the surname include:
Alberto Palacio, engineerAlfredo Palacio, former president of EcuadorAndy Palacio, Belizean musicianEmilio Palacio, Ecuadorian journalistErnesto Palacio, opera singerHéctor Palacio, Colombian road racing cyclistMilt Palacio, basketball playerRodrigo Palacio, footballerR. J. Palacio, American writer of the 2012 children's novel Wonder