The present paper reports the oxidative etching of Au nanospheres by an oxidant, KMnO4, which resulted in the formation of new particles of different reduced sizes from single starting nanoparticles. The significant blue-shifting (536 -> 527nm) of the surface plasmon band for Au nanospheres was observed due to their size alterations after oxidative dissolution of Au-0 to Au+3. This was supported by the cyclic voltammetry studies, which revealed an anodic peak at -0.90V in agreement with the standard electrode potential of Au-0/Au+3 (-0.96V). Dynamic light scattering (DLS) analysis showed that the hydrodynamic diameter of Au nanospheres (similar to 41nm) was decreased from similar to 26 to 4nm as a function of KMnO4 concentration, as further evidenced by TEM. This oxidation-driven process resulted in colloids with higher zeta potential, conductance, and enhanced catalytic activity (similar to 2 times) than their bare nanoparticles for the reduction of p-nitrophenol to p-aminophenol attributed to the higher surface area-to-volume ratio.