A novel method for isolation of monodispersed Pd nanoparticles from a reverse microemulsion was developed using hydrocarbon evaporation and methanol-assisted particle purification from a surfactant. Fcc Pd nanoparticles of 6, 8, 11, and 13 nm in diameter were isolated from water/ AOT/isooctane mixture and used to study a size effect during solvent-free hydrogenation of 2-methyl-3-butyn-2-ol to 2-methyl-3-buten-2-ol. The initial TOF calculated per mole of surface palladium atoms was duplicated when particle size was increased from 6 to 13 nm but remained constant when accounted per number of specific Pd atoms on Pd(111) facets. Selectivity to olefinic alcohol was not size-dependent, but an increase in particle size decreased the byproduct ratio of dimers to saturated alcohol. Acetylenic alcohol hydrogenation is shown to be a structure-sensitive but size-independent reaction for Pd particles with size of 6–13 nm. The work shows also that the Pd size controlled the reaction rate and the byproduct distribution.