The atomic structure of water-oxidizing nanoparticles (10-60 nm) formed from cobalt(II) salts and methylenediphosphonate (M2P) is investigated. These amorphous nanoparticles are of high interest for production of solar fuels. They facilitate water oxidation in a directly light-driven process using [Ru(bpy)(3)](2+) (bpy = 2,2'-bipyridine) as a photosensitizer and persulfate (S2O82-) as an electron acceptor. By X-ray absorption spectroscopy (XAS) at the cobalt K-edge, cobalt L-edge and oxygen K-edge, we investigate the light-driven transition from the Co-II/M2P precursor to the active catalyst, which is a layered cobalt(III) oxide with structural similarities to water-oxidizing electrocatalysts. The M2P ligand likely binds at the periphery of the nanoparticles, preventing their further agglomeration during the catalytic reaction. This system opens a possibility to link the catalytically active nanoparticles via a covalent bridge to a photosensitizer and build an artificial photosynthetic system for direct utilization of solar energy for fuel production without production of electricity as an intermediate step. This article is part of a Special Issue entitled: Photosynthetic and Biomimetic Hydrogen Production. Copyright (C) 2012, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.