This paper presents a new gel combustion method to synthesize palladium nanoparticles, palladium oxide (PdO) nanoparticles and palladium-palladium oxide nanocomposites. In the proposed method, there are some effective parameters including palladium chloride concentration, polyvinyl alcohol (PVA) concentration, acid concentration, solvent composition and combustion temperature that their values are investigated and optimized by the "one at a time" method. The experimental data shows that the combustion temperature is the main factor that controls the sample composition to obtain palladium, palladium oxide or palladium-palladium nanocomposites. Characterization of the synthesized samples is performed by SEM, TEM, XRD and BET specific surface area measurements. The optimized sample consisted of clusters; each cluster is composed of smaller nanoparticles with an average diameter of 25 mm and 10 m2. g-1 specific surface areas. The optimized Pd-PdO nanocomposite is successfully used as nanocatalyst for the hydrogen revolution.