A facile one-step hydrothermal templating method has been developed for the effective synthesis of mesoporous tin oxide hollow spheres (SnO2 HSs) and their functionalized Pd@SnO2 nanoreactor variants. Hollow sphere formation is accompanied by self-dissolution of silica templates under basic conditions. The Pd@SnO2 nanoreactors exhibit superior catalytic properties in gas- and solution-phase reactions.