Using PAMAM dendrimers as nanoparticle templates, a synthetic route to prepare 3 nm magnetic NiAu nanoparticles was developed. Aqueous solutions of hydroxyl-terminated generation 5 PAMAM dendrimers in 25 mM NaClO4 were shown to bind aqueous NiII. Coreduction of NiII and AuIII salts yielded bimetallic dendrimer stabilized nanoparticles, which were extracted into toluene with decanethiol. Characterization of the resulting monolayer protected clusters (MPCs) with transmission electron microscopy and UV–visible, atomic absorption, and X-ray photoelectron spectroscopies suggested that the MPCs had substantial surface enrichment in Au. Superconducting quantum interference device (SQUID) measurements at 5 K show the bimetallic MPCs to have low coercivity and saturation magnetization relative to bulk Ni. Solution nuclear magnetic resonance (NMR) studies using the Evans method showed the bimetallic nanoparticles retain magnetic properties at ambient temperatures.