The interaction between Shewanella oneidensis MR-1 and the soluble metal Pd(II) during the reductive precipitation of Pd(0) determined the size and properties of the precipitated Pd(0) nanoparticles. Assessment of cell viability indicated that the bioreduction of Pd(II) was a detoxification mechanism depending on the Pd(II) concentration and on the presence and properties of the electron donor. The addition of H₂ in the headspace allowed S. oneidensis to resist the toxic effects of Pd(II). Interestingly, 25 mM formate was a less effective electron donor for bioreductive detoxification of Pd(II), since there was a 2 log reduction of culturable cells and a 20% decrease of viable cells within 60 min, followed by a slow recovery. When the ratio of Pd:cell dry weight (CDW) was below 5:2 at a concentration of 50 mg l⁻¹ Pd(II), most of the cells remained viable. These viable cells precipitated Pd(0) crystals over a relatively larger bacterial surface area and had a particle area that was up to 100 times smaller when compared to Pd(0) crystals formed on non-viable biomass (Pd:CDW ratio of 5:2). The relatively large and densely covering Pd(0) crystals on non-viable biomass exhibited high catalytic reactivity towards hydrophobic molecules such as polychlorinated biphenyls, while the smaller and more dispersed nanocrystals on a viable bacterial carrier exhibited high catalytic reactivity towards the reductive degradation of the anionic pollutant perchlorate.