Studying structure‐sensitive reactions requires the synthesis of catalytic nanoparticles with precisely controlled sizes. In this work we demonstrate the facile production of size controlled Pd nanoparticles by confinement in the pores of mesoporous silica nanoparticles (MSN). We show that Pd particles 2.1 nm in size have a higher catalytic activity than larger nanoparticles for the Suzuki‐Miyaura cross coupling between 4’‐bromoacteophenone and phenyl boronic acid and for the hydrogenation of phenol in aqueous phase. The enhanced activity can be explained in terms of increased number of coordinatively unsaturated sites and higher back donation capacity of the small nanoparticles.