The physical and chemical properties of the colloidal solution change as a function of the concentration of nanoparticles. Here, we have studied the effect of systematic ultra-low dilution (up to 10 200 times) of gold nanoparticle colloidal, revealing the mechanism of colloidal formation in such extreme dilution. Optical spectroscopy confirms the presence of nanoparticles with narrow size distribution and high surface activity in higher dilutions (up to 10 200 times) colloidal solution.Particle size analysis of the serially diluted solution shows that the size distribution becomes morenarrow with increasing dilution. Transmission electron microscopy confirm the presence of nanoparticle up to 10 200 times dilution. The process of dilution introduces an active carbon layer on these particles. The understanding of such extreme dilution can be utilized in biomedical applications, especially in the Homoeopathy system.