Palladium nanoclusters were synthesized within microphase-separated diblock copolymer films of [MTD](113)[Pd(Cp-N)PA](50) (MTD = methyltetracyclododecene, Cp-N = endo-2-(cyclopentadienylmethyl) norborn-5-ene, PA = eta(3)-1-phenylallyl). The organometallic repeat units were reduced by exposing the films to hydrogen at 100 degrees C, leading to the formation of nearly monodisperse palladium nanoclusters. TEM, SAXS, and WAXS were used to characterized the polymer morphology and cluster size. The nanocomposites were active catalysts for hydrogenation of ethylene and propylene. The cluster size and voids within the polymer matrix were important factors in determining the catalyst activity, expressed as the moles of alkene hydrogenated per mole palladium per second. In contrast to permeation results that showed that the permeability of propylene in polyMTD is greater than that of ethylene, the catalyst activity for hydrogenation of ethylene was greater than that for propylene. (C) 1998 Elsevier Science Limited.