Well-dispersed and stable colloidal dispersions of polymer-protected Ni/Pd bimetallic nanoclusters have been obtained over an entire composition range by an improved polyol reduction method, in which nickel(II) sulfate and palladium(II) acetate were reduced at high temperature by ethylene glycol in the presence of poly(N-vinyl-2-pyrrolidone). Transmission electron microscopy indicates that these bimetallic nanocluster particles have definitely monodispersed size-distributions, with each particle containing both nickel and palladium atoms, The alloy structure has also been shown by X-ray diffraction and extended X-ray absorption finestructure analysis. X-ray absorption near-edge spectroscopic and X-ray photoelectron spectroscopic data have confirmed that the nickel in the bimetallic nanoclusters is in the zero-valence state, as stabilized by the presence of Pd. Dispersions of these bimetallic nanoclusters were used as homogeneous catalysts for hydrogenation of nitrobenzene at 30 degrees C under an atmospheric pressure of hydrogen. The catalytic activities are demonstrated to be dependent on the metal composition of the particles. The highest activity can be achieved for a bimetallic nanocluster with a molar ratio of Ni:Pd = 2:3, which exhibits 3.5 times greater activity than that of a typical colloidal palladium catalyst.