We describe the fabrication of hollow microspheres consisting of mesoporous silica nanoshells decorated with an inner layer of palladium nanoparticles and their use as Pd-nanoreactors in aqueous media. These palladium-equipped capsules can be used to promote the uncaging of propargyl-protected phenols, as well as Suzuki–Miyaura cross-coupling, in water and at physiologically compatible temperatures. Importantly, the depropargylation reaction can be accomplished in a bioorthogonal manner in the presence of relatively high concentrations of biomolecular components and even in the presence of mammalian cells.