The synthesis of air-stable and homogeneous gold nanoparticles (AuNPs) employing tert-butyl (naphthalen-1-yl)phosphine oxide as supporting ligand is described via NaBH, reduction of a Au(I) precursor, [(tert-butyl(naphthalen-1-yl)phosphine oxide)AuCl](2). This highly reproducible and simple procedure furnishes small (1.24 +/- 0.16 nm), highly soluble nanoparticles that are found to be highly active catalysts for the hydrogenation of substituted aldehydes, giving high conversions and chemoselectivities for a wide variety of substrates. In addition to catalytic studies the role of the novel stabilizer in the remarkable activity and selectivity exhibited by this system was interrogated thoroughly using a wide range of techniques, including ATR FT-IR, HRMAS NMR, XPS, and EDX spectroscopy. In particular, isotopic labeling experiments enabled us to probe the coordination mode adopted by the SPO ligand bound to the nanoparticle surface by ATR FT-IR spectroscopy. In combination with a series of control experiments we speculate that the SPO ligand demonstrates ligand-metal cooperative effects and plays a seminal role in the heterolytic hydrogenation mechanism.