Au is usually viewed as an inert metal, but surprisingly it has been found that Au nanoparticles less than 3-5 nm in diameter are catalytically active for several chemical reactions. We discuss the origin of this effect, focusing on the way in which the chemical activity of Au may change with particle size. We find that the fraction of low-coordinated Au atoms scales approximately with the catalytic activity, suggesting that atoms on the corners and edges of Au nanoparticles are the active sites. This effect is explained using density functional calculations.