The thermal reduction of [(PEt3)(2)PdMe2] (1mol%), which was produced in situ from [(PEt3)(2)PdCl2] (1) and 2 equiv of MeMgBr in toluene solvent, yielded palladium nanoparticles that in conjunction with MeMgBr effected the desulfurization of dibenzothiophene (DBT). The reaction resulted in the generation of the sulfur-free compound 2,2'-dimethylbiphenyl, in high yields (60%). The use of several stabilizing agents such as sodium 2-ethylhexanoate and hexadecylamine was also addressed herein, their use resulting in a significant improvement of the desulfurization reaction that reached up to 90% conversion of DBT into the mentioned biphenyl. The palladium nanoparticles formed during the reaction were characterized by transmission electron microscopy and exhibited a smaller size and a lesser extent of agglomeration whenever stabilizers were used.