c2006 Elsevier - A process has been developed which can prepare either hydrophilic or hydrophobic palladium nanoparticles within micelles. This unite property is profoundly related to the reaction of the surfactant, sodium dodecyl sulfate (SDS), and its self-generated derivatives, 1-dodecanol and lauric acid. In this process, SDS molecules dissolved in water not only form micelles for particle protection but also decompose into 1-dodecanol, which then reduces the Pd ions into Pd nanoparticles. In addition, the newly formed 1-dodecanol and lauric acid are responsible for the production of hydrophobic Pd nanoparticles within microemulsion droplets. The prepared particles were examined by transmission electron microscopy (TEM), Fourier transform-infrared (FT-IR), scanning electron microscopy (SEM). In addition, we found that the hydrophobic Pd nanoparticles reveal unusual ability to adsorb on substrates without any surface treatment.