Inherent in the colloidal synthesis of nanoparticle catalysts is the presence of an organic capping agent that encapsulates the nanoparticles to prevent aggregation. However, this capping agent often remains present on the nanoparticles during catalytic reaction, and the effect of this coating on catalysis is an important question that will influence the future applications of colloidal nanoparticles. In this study, the structure of poly(vinylpyrrolidone) (PVP) ligands on Pt nanoparticles is probed using sum frequency generation vibrational spectroscopy before and after cap removal by UV light. When the PVP is removed, carbonaceous fragments remain on the surface that dynamically restructure in H-2 and O-2. These fragments form a porous coating around the Pt in H-2 but collapse to a tightly closed shell in O-2. Using ethylene hydrogenation and methanol oxidation as a probe for the catalytic activity of the nanoparticles in H-2 and O-2, respectively, it is shown that the structure of these carbonaceous fragments controls the catalytic activity of the nanoparticles across several orders of magnitude by opening in H-2 and collapsing to block Pt sites in O-2. Kinetic experiments on thermally-cleaned PVP-capped and oleic acid-capped nanoparticles show that these findings apply to multiple capping agents and cleaning methods. This work highlights the dominant role of an organic cap to mediate nanoparticle catalysis and provides one example where capped nanoparticles are dramatically better catalysts than their uncapped analogues.