Stable palladium nanoparticles were prepared by the passivation of palladium–carbon covalent linkages by the reduction of diazonium derivatives. The resulting particles were characterized by TEM, UV-vis, FTIR, and NMR measurements. Interestingly, in electrochemical studies of the electronic conductivity of the particle solid ensembles, Pd–biphenyl particles exhibited metallic temperature dependence within the temperature range of 80 to 320 K; whereas the conductivity of Pd–decylphenyl particles showed a transition from semiconductor to metal at 180 K, manifested by their distinctly different temperature dependence. Control experiments with alkanethiolate-protected palladium nanoparticles in the same temperature range exhibited only semiconductor-like conductivity which increased with increasing temperature. The discrepancy was interpreted using Mott's model for metal–insulator transition and ascribed to the strong Pd–C interactions and low contact resistance, which facilitated the interparticle charge transfer.