Anew type of water soluble PEG core dendrimer having hydroxyl groups at the periphery was synthesized and used to prepare silver nanoparticles. The dendrimer and the dendrimer encapsulated nanoparticles (DENs) were characterized by spectroscopic techniques. The kinetics of catalytic activity of the prepared silver nanoparticle on the reduction of 4-nitrophenol to 4-aminophenol by NaBH4 as a reductant was studied using UV-Visible spectrophotometer. © 2012 The Chemical Society Located in Taipei &Wiley-VCH Verlag GmbH &Co. KGaA, Weinheim.