In the 2007–08 season, Palacio began an overseas adventure, signing for ex-European champions Partizan in Serbia. While struggling mightily at times to begin the year, he learned the European game quickly, playing some great basketball in the second half of the season and being named Euroleague's MVP for the month of March 2008, helping Partizan reach the last 8 of the competition for the first time in 10 years. In this season Palacio won triple crown with Partizan, winning the Basketball League of Serbia, Serbian Cup and ABA League.