Ru⁰-nanoparticles of approximately 5 nm size were generated by incipient impregnation of RuCl₃ into the nanopores of the acid activated Montmorillonite clay followed by polyol reduction. Acid activation of the clay increases the surface area by generating nanopores (0–10 nm), which act as a host and stabilize nanoparticles in the pores. The generated Ru⁰-nanoparticles exhibit inter-planar lattice fringe spacing of 0.21 nm of the face centered cubic lattice of Ru⁰ crystals, and show efficient catalytic activity in the chemoselective transfer hydrogenation reduction of substituted nitrobenzenes to corresponding anilines with high yield of conversion (56–97%) and selectivity (91–100%) depending upon the nature of the substituents. The reactions were carried out in the presence of isopropanol, which served as the solvent as well as the reductant. The catalysts were found to be active for several catalytic runs.