An efficient synthesis of Pd nanoparticles in water has been developed using a Fischer carbene complex of tungsten as the reductant andPEG as the capping agent. The colloidal palladium (1 mol %) efficiently catalyzes Hiyama cross-coupling reactions performed in air. Excellentyields of products were obtained with a wide range of substrates. Catalytic activity and stability of the nanoparticles were found to be inverselycorrelated.