[Display omitted] • Ammonium-capped Pd nanospecies selectively hydrogenolyze epoxides in water under H 2. • Epoxystyrene was reduced into 2-phenylethanol under basic conditions. • The sandalwood odorant, Florsantol®, was selectively obtained at a multigram scale. • A mechanism was proposed, corroborated by deuterium labelling experiments. Palladium nanoparticles, with core sizes of ca. 2.5 nm, were easily synthesized by chemical reduction of Na 2 PdCl 4 in the presence of hydroxyethylammonium salts and proved to be efficient for the selective hydrogenolysis of various aromatic, alkylphenyl, aliphatic epoxides in water as green solvent. Capping agents of the metal species were screened to define the most suitable micellar nanoreactors on two target substrates of industrial interest, epoxystyrene and 7,8-epoxy-2-methoxy-2,6-dimethyloctane. In our conditions, the hydrogenolysis of epoxystyrene proved to be pH-dependent, producing either the diol under acidic conditions, or the sweet-smelling 2-phenylethanol in the presence of a base. Promisingly, 7,8-epoxy-2-methoxy-2,6-dimethyloctane was completely and selectively hydrogenated into Florsantol®, a sandalwood odorant at a multigram scale (40 g and up to 175g). A general mechanism for the palladium nanoparticles-catalyzed hydrogenolysis of terminal epoxides was proposed according to steric and electronic properties and finely corroborated with deuterium labelling experiments. [ABSTRACT FROM AUTHOR]