Active site isolation in furfural (FA) hydrogenation was studied by poisoning a Pd catalyst with bismuth. A solution of FA in water was hydrogenated over a 5 wt% Pd/SiO2 catalyst in a batch reactor at various reaction temperatures and pressures. Furfuryl alcohol (FAL) was an intermediate product which was further hydrogenated into tetrahydrofurfuryl alcohol (TFAL) or cyclopentanone (CPA) and cyclopentanol (CPOL). While application of hydrogen pressure above 30 bar had little effect on the hydrogenation kinetics, a reaction temperature affected product distribution and the main product changed from TFAL (at 50 °C) to FAL (100 and 150 °C). Poisoning the catalyst with Bi decreased the number of available active sites but had little effect on the turn-over frequencies, most likely because of the absence of electronic effects of Bi on Pd nanoparticles. The main reaction product over the Bi-poisoned catalyst was FAL with no FA oligomerisation products. At a reaction temperature of 150 °C, CPA was formed with a 57% yield. Considering that Bi preferentially poisons step sites of Pd, the comparison of the product distribution between the Pd and Pd-Bi catalyst as well as the literature data for the alloy Pd-Cu catalysts indicates that the active site isolation observed in the Pd-Bi catalysts is responsible for the increasing FAL and CPA selectivities and elimination of oligomer by-products.