Heating of sol-gel entrapped Rh2Co2(CO)(12) at 100 degreesC and 0.02mm for 16h, results in the elimination of CO and the formation of immobilized metallic nanoparticles that efficiently catalyze hydrogenation of aromatic C-C bonds. The catalytic activity can be further increased by pretreatment of the sol-gel material with molecular hydrogen. The resulting immobilized catalyst can be used repeatedly in a variety of different hydrogenation processes. Carbon monoxide reacts with the encapsulated metallic particles to give catalytically inactive metal carbonyls.