Spherical nanosize Ag/SiO2 composite particles have been synthesized within reverse micelles via metal alkoxide hydrolysis and condensation. The size of the particles and the thickness of the coating can be controlled by manipulating the relative rates of the hydrolysis and condensation reactions of tetraethoxysilane (TEOS) within the microemulsion. Composite particles in the size range 20-35 nm are produced. As the molar ratio of water to surfactant is increased above 10, the size distribution broadens. Absorption spectra have been used to dynamically monitor the reaction and growth. The effects of other synthesis parameters, such as the molar ratio of water to TEOS and the amount of base catalyst, are discussed. Possible mechanisms for the formation of the nanocomposite particles are also discussed.