Palladium‐immobilized polymer‐coated magnetic nanoparticles (MNP@polymer‐Pd) were successfully synthesized for use as reusable catalysts for the reduction of 4‐nitrophenol (4NP) in water. The homopolymers and copolymers (e.g. poly(poly(ethylene glycol) methacrylate), PPEGMA; poly(2‐dimethylamino)ethyl methacrylate, PDMAEMA; and poly(2‐diethylamino)ethyl methacrylate, PDEAEMA) were well designed to chemically graft on the surface of the magnetite nanoparticles (MNPs) with the rationalization that PPEGMA improved their water dispersibility and the amino‐containing polymers, e.g. PDMAEMA and PDEAEMA, enhanced the coordinating interaction with Pd and essentially improved their recycling efficiency. The presence of Pd and Fe in the nanocomposites was confirmed via energy‐dispersive X‐ray spectroscopy. The nanocomposites possessed Pd loadings ranging between 0.7006 and 0.8442 mmol g–1. The nanocomposites containing PDMAEMA or PDEAEMA showed higher immobilization efficiency of Pd on their surface than those without these amino‐containing polymers. Interestingly, the nanocomposites having PDEAEMA exhibited an improved catalytic activity for the 4NP reduction compared to those having PDMAEMA. They displayed sustainable reusability for the 4NP reduction after eight cycles without a significant loss in their catalytic performance (99% conversion). © 2022 Society of Industrial Chemistry.