Formation of catalytically active species in the system AlEt3-Co(acac)(2) known as a catalyst for hydrogenation and polymerization is discussed based on the results of chemical, kinetic and physico-chemical (ESR, IR, UV, TEM, XRD) analysis. The formation of nanoscale cobalt metal particles is demonstrated. The particles are assumed to comprise the metal core and a stabilizing coating consisting of AlEt3, Et2Al(acac) and the products of their transformations. The dependence of hydrogenation activity of the catalytic system on the Al/Co ratio passes through maximum, that is explained by changes of the composition of the nanoparticle stabilizing coating. (c) 2005 Elsevier B.V. All rights reserved.