This Letter reports the first measurement of photonuclear
D
0
meson production in ultraperipheral heavy ion collisions. The study is performed using lead-lead collision data, with an integrated luminosity of
1.34
nb
−
1
, collected by the CMS experiment at a nucleon-nucleon center-of-mass energy of 5.36 TeV. Photonuclear events, where one of the colliding nuclei breaks up and the other remains intact, are selected based on breakup neutron emissions and by requiring no particle activity in a large rapidity interval in the direction of the photon-emitting nucleus. The
D
0
mesons are reconstructed via the
D
0
→
K
−
π
+
decay channel, with the cross section measured as a function of
D
0
meson transverse momentum and rapidity. The results are compared with next-to-leading-order perturbative QCD calculations that employ recent parametrizations of the lead nuclear parton distribution functions, as well as with predictions based on the color glass condensate framework. This measurement is the first photonuclear collision study characterizing parton distribution functions of lead nuclei for parton fractional momenta
x
(relative to the nucleon) ranging approximately from a few
10
−
4
to
10
−
2
for different hard energy scale
Q
2
selections.
