Polymer supported palladium nanoparticles, generated in situ by Pd(II) reduction under reaction conditions, catalyzed the hydrogenation of nitroarenes to anilines with high efficiency in water at room temperature in the presence of NaBH4. The protocol proved to be highly selective and generally favored the formation of the desired aniline as single product in high yields with short reaction times. TEM analyses revealed that the size distribution of the formed Pd nanocrystals was regulated by the reductant agent. In details, when 1 atm H2 was used as the nitroarene reductant, the in situ generated polymer supported palladium nanoparticles were crystallites with diameters ranging from 6 to 10 nm. On the contrary, when the reaction was carried out in the presence of NaBH4 in water under N2 or air, the formation of Pd nanocrystallites was observed as well, but this time they were smaller (mean size diameter ca. 3 nm) and catalytically more active compared to the palladium nanoparticles formed under 1 atm H2 in the absence of NaBH4. The catalyst displayed excellent recyclability over twelve cycles and no leaching of metal into solution occurred, which made the overall system eco-friendly and economic.