A novel hollow magnetic nanoreactor with Pd support has been successfully prepared for catalytic reduction of methylene blue and p-nitrophenol. The nanocatalyst perfectly combines the advantages of various structures, so large specific surface area and satisfactory catalytic activity can be acquired. The hollow structure, which can be considered as a nanoreactor, improves the mass transfer and the rate of reaction under the micro-power generated by concentration difference. In addition, given its satisfactory stability and paramagnetic property, the nanospheres can be reused for a minimum of 10 times, separated rapidly, and recovered conveniently using a magnet.