In this study, silver nanoparticles were prepared by the reduction of silver nitrate in SDS+ isopentanol/styrene/H2O reverse microemulsion system using sodium citrate as reducing agent. The Ag/PS nanocomposite particles were prepared by in situ emulsion polymerization of the styrene system containing silver nanoparticles that did not separate from the reaction solution. The polymerization dynamic characteristic was studied, at the same time, silver nanparticles and the encapsulation of composite particles were characterized by Fourier-transform-infrared spectroscopy (FTIR), transmission electron microscopy (TEM), X-ray diffraction (XRD) measurement, UV–vis diffuse reflectance spectroscopy, and X-ray photoelectron spectroscopy (XPS). The results of TEM and UV–vis absorption spectra showed that well-dispersed silver nanoparticles have a narrow size distribution. XRD showed that Ag and Ag/PS nanocomposite particles were less than 10 and 20 nm in size, which is similar to those observed by TEM. The results of XPS spectra revealed that the microemulsion system can stabilize the silver nanoparticles from aggregation and provided supporting evidence for the polystyrene encapsulated silver nanoparticle structure. © 2008 Wiley Periodicals, Inc. J Appl Polym Sci, 2008.