In this study, highly stable gold and silver nanoparticles evenly distributed within a crosslinked poly(acrylamide)/poly(N-(hydroxymethyl)acrylamide) (PAAm-PHAAAAm) network have been fabricated without addition of a reducing agent. Remarkably, the same chemical hydrogel composition has been involved in the successful fabrication of spherical gold and silver nanoparticles within the hydrogel template. The hydrogel network acts simultaneously as an efficient reducing agent and stabilizer. The PAAm-PHMAAm hydrogel network binds metal ions and, following reduction of bound to crosslinked template metal ions, proceeds via oxidation of hydroxymethyl hydrogel fragments. A one-electron mechanism is proposed for the formation of the silver and gold nanoparticles.