The inert gas-condensation method (ISC) that has been routinely used for production of nanostructured powders has a number of experimental limitations, especially in scale-up. To overcome these difficulties an aerosol how condenser (AFC) was constructed and its characteristics and performance were determined. The structure, morphology and the primary particle-size distribution of palladium powders produced under various gas flow conditions were investigated by transmission electron microscopy. The size of the Pd particles were found to be log-normally distributed with median diameters of primary particles between 2.52 and 10.6 nm and geometric standard deviations (GSD) between 1.48 and 1.89. Compared with IGC, the AFC process results in an 80% reduction in the primary particle median diameter and a 17% reduction in the GSD. The primary particle median diameter and the GSD were found to be strongly dependent on the prevalent flow conditions.