Colloidal dispersions of noble metals in synthetic polymers are prepared by reduction with alcohol. Reflux of a solution of rhodium(III) chloride and poly(vinyl alcohol) (PVA) in a methanol-water mixed solvent under argon or air for 4 hr gives a homogeneous solution of colloidal dispersion of rhodium (Rh-PVA-MeOH/H2O). The particle size of metallic rhodium is distributed n a narrow range of 30-70 Å, and the average diameter is 40 A. The formation of colloidal rhodium proceeds through three steps: coordination of poly(vinyl alcohol) to rhodium(III) ion, reduction with methanol to form small particles (8 Å in diameter), and growth of the small particle to large particle (40 Å in diameter). Polyvinylpyrrolidone (PVP) and poly(methyl vinyl ether) (PMVE) can be used in place of poly(vinyl alcohol) and result in colloidal dispersions, respectively, similar to Rh-PVA-MeOH/H2O. Colloidal dispersions in nonaqueous solvent can be prepared by using ethanol instead of methanol-water (Rh-PVP-EtOH) and by using methanol instead of methanol-water, with addition of small amount of methanol solution of sodium hydroxide (Rh-PVP-MeOH/NaOH). The average diameters of rhodium particles in Rh-PVP-EtOH and Rh-PVP-MeOH/NaOH are 22 and 9 Å, respectively. The colloidal dispersions of palladium, silver, osmium, iridium, platinum, and gold in aqueous or nonaqueous solvent are prepared by using polyvinylpyrrolidone. The colloidal dispersions are very stable even under air for 20 days. Those of rhodium, palladium, and platinum are effective catalysts for hydrogenation of olefins at 30°C under an atmospheric hydrogen pressure. The colloidal dispersion of palladium catalyzes highly selective hydrogenation of diene and dienoate to monoene and monoenoate, respectively.