This article reports the first effort for the preparation of Pd-Rh bimetallic nanoparticles in the presence of poly(amidoamine) dendrimers with surface hydroxyl groups (fourth generation, PAMAM-OH). The resulting dendrimer-encapsulated Pd-Rh bimetallic nanoparticles show a promising catalytic activity in partial hydrogenation of 1,3-cyclooctadiene. (C) 2003 Elsevier B.V. All rights reserved.