The polymerization of acetylene, studied experimentally and theoretically on nanocatalysts consisting of nanoscale clusters of different size and elemental composition, is reviewed. As on bulk systems palladium is the most active transition metal for this reaction. More important, however, is the changing selectivity as function of size and elemental composition. As an example, palladium atoms, dimers, and trimers, as well as nanoscale copper clusters are highly selective for the cyclotrimerization reaction. In the case of palladium, the pi-bonding of acetylene and a charge transfer from the substrate to the atom/cluster are responsible for the high selectivity. In addition DFT calculations revealed the whole reaction path of this reaction on palladium atoms and it could be shown that in contrast to bulk systems the rate-determining step is the formation of benzene from the Pd(C4H4)C2H2 complex. (C) 2003 Elsevier Science B.V. All rights reserved.