A set of Pd nanoclusters embedded in rGO, referred to as Pd@rGO (viz. Pd@rGO0.16, Pd@rGO0.32, Pd@rGO0.48, Pd@rGO1), where subscripts indicate the mmol of cetyltrimethylammonium bromide (CTAB) were synthesized using water as a solvent by simply varying the amount of CTAB that was used to control both morphology and size. TEM analysis indicated that the average particle sizes of Pd@rGO0.16 and Pd@rGO0.32 fall in the range of 4.5-5.0 nm and 20–25 nm, respectively. On the other hand, particles were found to be agglomerated in Pd@rGO0.48 and Pd@rGO1. The Pd@rGO0.16 composite was exhaustively characterized by TEM, SEM-EDAX, powder X-ray diffraction, XPS, and ICP-AES measurements. ICP-AES analysis of Pd@rGO0.16 indicated that 0.01g of Pd@rGO0.16 contains 0.09 mol % Pd. The catalytic potentiality of these NPs was investigated for direct C(sp2)-H bond activation of various indoles with aryl boronic acids. Among the four composites, Pd@rGO0.16 exhibited the best activity for the abovementioned organic transformation. Different indoles with varying electronic groups underwent coupling with aryl boronic acids giving up to 86% product yield. It was retrievable for up to five consecutive catalytic cycles without compromising its catalytic activity.