The heteropoly acid H3PMo12O40 (PMo) and Ni in situ encaged in the secondary pore of nanocrystalline HZSM-5 zeolites was prepared from molybdenum oxide and phosphoric acid and nickel nitrate, in a slurry mixture of nanocrystalline HZSM-5 zeolite crystals and deionized water. Catalysts were characterized by ICP, FT-IR, XRD, (31)p MAS-NMR, ESR, Py-IR, NH3-TPD, BET, SEM and TEM. PMo cannot enter the interior pores of the zeolite, but becomes encaged in the secondary pore of nanocrystalline HZSM-5 zeolite. The hydroconversion of n-octane over various catalysts was investigated in order to obtain light isomers of alkanes and aromatics products with high octane number. From the results presented in the paper, it is clear that the catalytic properties of the "in situ encaged" PMo-Ni and impregnated PMo-Ni properties are similar, and the number and distribution of Bronsted and Lewis acid sites in these two catalysts are similar, too. It is concluded that both the aromatization of n-octane and the ability of producing light iso-alkanes are enhanced over the PMo and Ni 'in situ encaged' and impregnated catalysts than other catalysts. The effects of the acidity and temperature on the activity of n-octane hydroconversion over investigated catalysts are demonstrated. (c) 2007 Elsevier Ltd. All rights reserved.