Microbial reduction of soluble Pd(II) by cells of Shewanella oneidensis MR-1 and of an autoaggregating mutant (COAG) resulted in precipitation of palladium Pd(0) nanoparticles on the cell wall and inside the periplasmic space (bioPd). As a result of biosorption and subsequent bioreduction of Pd(II) with H2, formate, lactate, pyruvate or ethanol as electron donors, recoveries higher than 90% of Pd associated with biomass could be obtained. The bioPd(0) nanoparticles thus obtained had the ability to reductively dehalogenate polychlorinated biphenyl (PCB) congeners in aqueous and sediment matrices. Bioreduction was observed in assays with concentrations up to 1000 mg Pd(II) l(-1) with depletion of soluble Pd(II) of 77.4% and higher. More than 90% decrease of PCB 21 (2,3,4-chloro biphenyl) coupled to formation of its dechlorination products PCB 5 (2,3-chloro biphenyl) and PCB 1 (2-chloro biphenyl) was obtained at a concentration of 1 mg l(-1) within 5 h at 28 degrees C. Bioreductive precipitation of bioPd by S. oneidensis cells mixed with sediment samples contaminated with a mixture of PCB congeners, resulted in dechlorination of both highly and lightly chlorinated PCB congeners adsorbed to the contaminated sediment matrix within 48 h at 28 degrees C. Fifty milligrams per litre of bioPd resulted in a catalytic activity that was comparable to 500 mg l(-1) commercial Pd(0) powder. The high reactivity of 50 mg l(-1) bioPd in the soil suspension was reflected in the reduction of the sum of seven most toxic PCBs to 27% of their initial concentration.