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On September 20, 2019, Palacio was rehired as an assistant coach by the Long Island Nets, the NBA Development League affiliate of the Brooklyn Nets after a successful 2018-2019 season.

In 2013, Palacio joined Don Verlin's staff at the University of Idaho as director of player development.

In August 2011, Palacio signed a one-year deal with Blu:sens Monbús, where he averaged 6.4 points and 2.4 assists in the 2011–12 season. During the summer of 2012, Palacio played for Piratas de Quebradillas in Puerto Rico. He started the 2012–13 season with Bnei HaSharon in Israel, but finished with Lietuvos rytas in Lithuania.

During the 2008 summer transfer window, Palacio moved to the Russian team Khimki. After a year there, in September 2009, he rejoined Partizan, but was released from his contract few weeks later, after he had not joined the team on time. On January 5, 2010, Palacio signed a contract with the Greek League team Kavala. In 16 games for Kavala, Palacio averaged 10.3 points, 2.6 assists and 2.6 rebounds per game, which has helped the club avoid relegation.

On May 4, 2010, Palacio moved to Spain and signed with Caja Laboral by the end of the 2009–10 season. He helped the Basque team to win the national title for the third time in the club history, beating Barcelona 3–0 in the final series. He then returned to Kavala in August 2010, signing a one-year contract. He averaged 15.7 points, 3.8 assists and 1.3 steals during the regular season, and thus led the team to the playoffs. After the team was eliminated by PAOK, Palacio again moved to Caja Laboral until the end of the 2010–11 season.

Palacio was also a member of the team that won a silver medal at the 2009 FIBA COCABA Championship, held in Cancún, Mexico, losing in the finals of the hosts 106–103.

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.

Despite a solid season with the Jazz, Palacio was a free agent at the start of the 2006–07 preseason. He eventually caught on with the Seattle SuperSonics, but was waived before the regular season start, unable to unseat Mike Wilks as the third-string point guard behind Luke Ridnour and Earl Watson.

His most notable achievement was scoring a buzzer beater for the Celtics in their shocking victory over the New Jersey Nets on December 28, 2000. With the Nets leading 111–109 and inbounding the ball with less than 2 seconds remaining, Palacio stole a pass from Lucious Harris and threw up an off-balance shot with one hand from 30 feet away. Improbably, the shot was made, giving the Celtics a 112–111 victory. Basketball writers dubbed Palacio with the nickname "Miracle Milt", as a recognition of this incredible incident.

Palacio attended Junípero Serra High School in Gardena, California. He played college basketball at Midland College and Colorado State University, going undrafted in 1999. In his three years with the Rams, Palacio averaged 12.1 points, 4.8 assists and 4.2 rebounds per game.

In a seven-year NBA career, from 1999 to 2006, Palacio played for the Vancouver Grizzlies, Boston Celtics, Phoenix Suns, Cleveland Cavaliers, Toronto Raptors and Utah Jazz, with a career scoring average of 4.8 points per game.

In his first international tournament, Palacio led Belize to a gold medal at the 1998 CARICOM Basketball Championship, which the country hosted.

Milton Sigmund Palacio (born February 7, 1978) is a Belizean-American professional basketball player. He was formerly the director of player development at the University of Idaho.