The preparation of palladium ultrafine particles by the reduction of Pd(NH3)(4)Cl-2 with hydrazine in AOT/isooctane reverse micellar solutions has been studied. By the analyses of high-resolution electron microscope, electron diffraction pattern, and XRD, the resultant particles have been found to be pure fee palladium. Their sizes were observed to increase first and then approach constant values with increases in the molar ratio of water to AOT (omega(0)) and in the concentration of Pd(NH3)(4)Cl-2, but were not significantly affected when the concentration ratio of hydrazine to Pd(NH3)(4)Cl-2 was above 10, the AOT concentration increased from 0.1 to 1.0 M, the temperature varied from 15 to 35 degrees C, and the pH of aqueous phase of Pd(NH3)(4)Cl-2 was between 7 and 12. In addition, the kinetic study of particle formation indicated that the nucleation time needed several minutes. After nucleation, the particles grew to their final sizes within several to tens of minutes. The formation rates were found to be faster at larger omega(0) values and higher AOT and Pd(NH3)(4)Cl-2 concentrations.