This work outlines a novel method for the synthesis of stable gold nanoparticles within the spatially confined region of vesicles. For the first time, Span/cholesterol based niosomes have been used for nanoparticle synthesis. The restricted geometry within niosomes prevents nanoparticle aggregation. The results have important implications for controlled delivery of nanoparticles for therapeutic applications. (C) 2012 Elsevier Inc. All rights reserved.