Palladium nanoparticles, stabilized by poly(vinylpyrrolidone) (PdNP@PVP), catalyze the ring-opening of limonene dioxide (LDO) with water. The use of PdNP@PVP selectively results in the ring opening of the exo-cyclic epoxide to form 1. Contrarily, using different concentrations of only poly(vinylpyrrolidone) (PVP) alone, a selectivity toward the exo-cyclic 1 or endo-cyclic epoxide ring-opening 2 was observed. Investigations revealed that this selectivity is due to kinetic control of the reaction. The cis- and trans-LDO isomers showed different reactivities, reacting to limonene-8,9-diol and limonene-1,2-diol, respectively.