Monodisperse palladium nanoparticles consisting of 10-200 atoms were prepared using poly(amido)amine (PAMAM) dendrimer templates and were evaluated as catalysts using the model reduction of para-nitrophenol. The use of dendrimer templates allows for fine control of the average number of atoms per nanoparticle and systematic investigation of the effect of size on the catalytic activity of nanoparticles less than 2 nm in diameter. The palladium dendrimer-encapsulated nanoparticles (DENs) were found to be highly active for the hydrogenation of para-nitrophenol to para-aminophenol, with surface area-normalized rate constants ranging from 0.87 to 1.65 L s-1 m -2 (which is greater than any previously reported system). A near linear dependence of the observed rate constant on the synthetic Pd 2+:dendrimer ratio was observed, suggesting that, within the size regime studied, most of the atoms lie on the surface of the nanoparticle and contribute to the catalytic activity. Interestingly, for Pd clusters containing between 10 and 50 atoms, the rate constant normalized on a per atom basis shows little variability, supporting the idea that all atoms lie on the surface of these clusters. However, for particles containing between 50 and 200 atoms, a decrease in per-atom activity is observed with increasing particle size, suggesting that in this size regime some atoms are located in the catalytically inactive core. Additionally, the generation of the PAMAM dendrimer template was found to have a significant effect on the observed rate constant due to steric crowding at the periphery (whereas the choice of an amine-or hydroxyl-termination on the dendrimer periphery did not).