A simple and an efficient approach for in situ preparation of palladium nanoparticles (Pd NPs) in ionic liquid crystal (ILC) microemulsion is described. Microemulsion was formed by using a ternary mixture of triton X-100/ILC/water (in the ratio of 1.4:0.1:8.5). Three such microemulsions-1, 2 and 3 were formed by using three different ILCs namely ammonium ILC containing a cholesterol core (ILC-1), imidazolium ILC bearing a cholesterol core (ILC-2) and imidazolium ILC containing a biphenyl core (ILC-3), respectively. The Pd NPs were characterised using UV–vis spectroscopy, transmission electron microscopy and X-ray diffraction studies. Among the three, microemulsion-2 which was prepared using ILC-2 yielded stable NPs with an average particle size of ~20 nm. The NPs prepared in all three emulsions were examined as catalyst for Heck reaction. The catalytic efficiency was analysed for four cross-coupling reactions involving iodobenzene with different substituted alkenes namely methyl acrylate, ethyl acrylate, butyl acrylate and styrene. The coupling reactions were completed in a shorter period with good yields. Further, the recyclability test of Pd NPs revealed that the particles showed good activity until third catalytic cycle. The Pd NPs prepared in microemulsion-2 showed better activity compared to those prepared in microemulsions-1 and -3.