A new straightforward method for the synthesis of gold nanoparticles from addition of cyclohexanone to aqueous solutions of auric acid at room temperature is presented. By understanding this process we have discovered a new organic chemistry transformation reaction for converting cyclic ketones to α-chloro ketones and a mechanism for the nanoparticle formation. Contrary to conventional gold nanoparticle syntheses, the reaction “self-initiates” at room temperature and forms an increasingly red solution over ≈60 minutes. By studying the gold colloid's formation using transmission electron microscopy it was observed that large dendritic (63 ± 21 nm diameter) structures made of clustered particles (6 ± 1 nm) were initially formed. These dendritic particles then compacted into an array of denser shapes that slowly increase in size until the reaction is complete. The most prominent shapes observed were spheres (43 ± 7 nm); other shapes included dodecahedra (39 ± 10 nm) triangular (≈50 nm in height) and hexagonal (≈70 nm wide) nanoplates. The solution was stable to precipitation for over 3 months. During this period the nanoplate structures substantially increased in size (triangular ≈ 250 nm, hexagonal ≈ 320 nm) whereas other structures showed no further growth. X-ray diffraction studies demonstrated that the gold nanoparticles were crystalline. The formation of the 2-chlorocyclohexanone by-product was observed in solution phase 1H & 13C NMR, gas phase chromatography and IR spectroscopy. A mechanism is presented to account for this by-product and the reduction of auric acid to gold.