Rhodium (0) nanoparticles were generated in the nanopores of Montmorillonite K-10 clay by reduction of RhCl3 center dot 3H(2)O impregnated clay with NaBH4. Pore size of the clay and hence the size of Rh nanoparticle was controlled by choosing <2 mu m fraction of the clay as catalyst support. TEM/HRTEM/SAED images confirmed the growth of well dispersed spherical Rh (0) nanoparticles in 1-3 nm diameter range having face centred cubic lattice with inter-planar lattice fringe spacing of 0.23 nm corresponding to [1 1 1] planes. XPS analysis confirmed the presence of Rh metal in zero oxidation state and absence of other oxidation states of Rh. BET surface area determination through N-2 adsorption-desorption isotherm revealed decrease in surface area of the clay support from 298 m(2)/g to 196.4 m(2)/g after incorporation of Rh (0) nanoparticles. The Rh (0) nanoparticles supported clay is proved to be highly active and selective heterogeneous catalyst for hydrogenation of monoterpenes (geraniol, limonene, beta-pinene, citronellal and linalool) at ambient temperature and pressure (1-4 bar). The number of active sites was calculated using surface statistics and adopting model for full shell clusters. Turnover frequency (TOF) calculations for the catalyst gave encouraging results. (C) 2013 Elsevier B.V. All rights reserved.