Nanocrystalline nickel powders were prepared from aqueous solution by reducing their corresponding metal salts under suitable conditions. The experimental conditions including the types and concentration of Protective agents, feeding order and the PH of the solution that influence, the average particle size were studied in detail. X-ray powder diffraction patterns show that the nickel powder is cubic crystallite. The average particle size of the ultrafine nickel powder is 50 nm. In addition, we also studied the effect of particle size in liquid phase dehydrogenation of 2-butanol. The results show that the smaller particle size is favored of increasing catalytic activity.