Nearly monodisperse (1.7 +/- 0.2 nm) palladium nanoparticles were prepared within the interiors of three different generations of hydroxyl-terminated poly(amidoamine) (PAMAM) dendrimers. These dendrimer-encapsulated catalysts (DECs) were used to hydrogenate allyl alcohol and four a-substituted derivatives in a 4:1 methanol/water mixture. The results indicate that steric crowding on the dendrimer periphery, which increases with dendrimer generation, can act as an adjustable-mesh nanofilter. That is, by controlling the packing density on the dendrimer periphery, it is possible to control access of substrates to the encapsulated catalytic nanoparticle. In general, higher-generation DECs or larger substrates resulted in lower turnover frequencies (although some interesting exceptions were noted). Although the main products of the olefin hydrogenation reactions were the corresponding alkanes, ketones were also obtained when monosubstituted cr-olefins were used as substrates. NMR spectroscopy was used to measure the size selectivity of DECs for the competitive hydrogenation of allyl alcohol and 3-methyl-1-penten-3-ol. The effect on catalytic rate as a function of nanoparticle size is also briefly discussed.