Nickel nanoparticles were synthesized by adding aqueous nickel salt into a microcrystalline cellulose matrix. The NiII ions were reduced with either sodium borohydride, NaBH, or potassium hypophosphite, KHPO, in water or aqueous NH medium. The mass fraction of Ni in the samples was between 3.7 and 8.9%. X‐ray absorption spectra at the Ni K‐edge showed that Ni was partially oxidized only in a sample reduced with NaBH. Wide‐angle X‐ray scattering results showed that nickel was in nanocrystalline or amorphous form in the samples. Upon heating fcc Ni, hcp Ni, NiO, NiP and other Ni–P phases formed depending on the reduction parameters. Using anomalous small‐angle X‐ray scattering the nanometre‐scale particle size distributions of the Ni particles were determined. A large fraction of particles less than 15 nm in size were observed in the samples reduced in aqueous ammonium compared with the samples reduced in water. Particles reduced in aqueous ammonium had a large ferromagnetic component.