Palladium nanocatalysts have been prepared by anchoring (eta(3)-C(3)H(5))(2)Pd(2)Cl(2) onto dian-tine-functionalized MCM-41 supports followed by reaction with hydrogen under catalytic conditions. The catalyst precursor and used catalyst have been studied by solid-state NMR ((13)C, (29)Si), XPS, and TEM. The organometallic-derived catalyst exhibits the best performance (activity and selectivity) to date toward the selective hydrogenation of industrially relevant o- and m-chloronitrobenzene to the corresponding chloroaniline derivatives and is distinctly superior to 5% Pd/C. Grazing angle XPS studies reveal that conversion of the tethered molecular species to the nanoparticles of palladium produces a core-shell nanostructure.