Radical polymerization reactions were employed to synthesize thermo‐responsive poly(N‐isopropylacrylamide‐co‐1‐vinylimidazole), p (NIPAM‐co‐VIm), hydrogels at room temperature. A postquaternized cross‐linking strategy was reported to fabricate thermo‐sensitive quaternized‐p (NIPAM‐co‐VIm) ionic hydrogels, Q‐p (NIPAm‐co‐VIm). Combination of methods (high‐resolution X‐ray photoelectron spectroscopy, dynamic light scattering, and atomic absorption spectroscopy) was employed to characterize the composite material. Following the concept of a “green chemistry,” the oxidation of alcohols/olefins was carried out in aqueous solution by using nanocomposites, p (NIPAM‐co‐VIm) and Q‐p (NIPAM‐co‐VIm). It was found that the catalytic activity of the metal nanocomposite can be modulated by the lower critical solution temperature (LCST) of particles. The catalyst showed improved catalytic activity above LCST. Quaternized composites showed higher catalytic activity than unquaternized counterparts, due to their high hydrophobicity, effective interactions between substrates and catalyst, and high flexibility. In addition, we demonstrated that the catalytic activity of the nanocomposites can be tuned by the volume phase transition within the hydrogel by using the catalytic reduction of 4‐nitrophenol/nitrobenzene, NP/NB, as the hydrophilic/hydrophobic substrates model. For 4‐NP, with an increase in temperature from 25°C to 35°C (<LCST), the apparent rate constant values had a downward trend. On the contrary, for NB, this value had an upward trend. These results revealed that different changes in rate constant for 4‐NP and NB with temperature should be attributed to significant differences in NP/NB affinity to interact with Ag‐NPs in the hydrogel. Moreover, the catalysts could efficiently be recycled four times without losing their quality. FT‐IR spectra and atomic absorption spectroscopy also proved that the catalysts were recyclable, durable, and leaching‐resistant.