A (β,δ,Δ)-padded decomposition of an edge-weighted graph G=(V,E,w) is a stochastic decomposition into clusters of diameter at most Δ such that for every vertex v∈V, the probability that ballG(v,γΔ) is entirely contained in the cluster containing v is at least e−βγ for every γ∈[0,δ]. Padded decompositions have been studied for decades and have found numerous applications, including metric embedding, multicommodity flow-cut gap, muticut, and zero extension problems, to name a few. In these applications, parameter β, called the padding parameter, is the most important parameter since it decides either the distortion or the approximation ratios. For general graphs with n vertices, β=Θ(logn). Klein, Plotkin, and Rao showed that Kr-minor-free graphs have padding parameter β=O(r3), which is a significant improvement over general graphs when r is a constant. A long-standing conjecture is to construct a padded decomposition for Kr-minor-free graphs with padding parameter β=O(logr). Despite decades of research, the best-known result is β=O(r), even for graphs with treewidth at most r. In this work, we make significant progress toward the aforementioned conjecture by showing that graphs with treewidth tw admit a padded decomposition with padding parameter O(logtw), which is tight. As corollaries, we obtain an exponential improvement in dependency on treewidth in a host of algorithmic applications: O(√logn⋅log(tw)) flow-cut gap, max flow-min multicut ratio of O(log(tw)), an O(log(tw)) approximation for the 0-extension problem, an ℓO(logn)∞ embedding with distortion O(logtw), and an O(logtw) bound for integrality gap for the uniform sparsest cut.