In this paper we studied the potential of nanocrystalline palladium particle production using Cinnamom zeylanicum bark extract (CBE) as the biomaterial for the first time. We studied the effects of biomaterial dosage, pH and temperature on nanoparticle formation: none of these factors had a major effect on the size and shape of the nanoparticles formed. Transmission electron microscopy (TEM) observations confirmed the synthesis of nano-sized palladium particles. More or less uniformly sized palladium nanoparticles were synthesized with an average size ranging from 15 to 20 nm. It was found that the zeta potential of these formed palladium nanoparticles was negative. and that it increased with an increase in pH. Energy dispersive X-ray (EDX) analysis results confirmed the significant presence of palladium. Of the palladium ions, 60% were reduced to a zero valent form by CBE. Terpenoids are believed to play an important role in palladium nanoparticle biosynthesis through the reduction of palladium ions. Currently, however, the exact mechanism for the synthesis of palladium nanoparticles is unclear. Our protocol for the phyto-synthesis of palladium nanoparticles under moderate pH and room temperature offers a new means to develop environmentally benign nanoparticles. (C) 2009 Elsevier B.V. All rights reserved.