Pd nanoparticles capped by thiol derivatives were prepared in AOT reverse micelles. Studies of UV-vis spectra have indicated that nitrogen purging plays an important role in the formation of Pd nanoparticles while without nitrogen purging results in the formation of Pd(II)-S complexes. Experimental results have also shown that thiolated poly(ethylene glycol) and tiopronin, which could be used to form water-soluble gold nanoparticles, did not favor the formation of isolated water-soluble Pd nanoparticles. However, tiopronin-capped Pd nanoparticles are found to be able to self-organize into nearly spherical aggregates. (c) 2006 Elsevier B.V. All rights reserved.