Water soluble polymer stabilized iron(0) nanoclusters were prepared from the reduction of iron(III) chloride by sodium borohydride (SB) and ammonia borane (AB) mixture in the presence of polyethylene glycol (PEG) as stabilizer and ethylene glycol as solvent at 80 degrees C under nitrogen atmosphere. PEG stabilized iron(0) nanoclusters were isolated from the reaction solution by centrifugation and characterized by UV-Vis, TEM, HRTEM, XRD, ICP-OES and FT-IR methods. The particle size of PEG stabilized iron(0) nanoclusters ranges from 4.0 nm to 8.5 nm with a mean value of 6.3 nm. They are redispersible in water and yet highly active catalysts in hydrogen generation from the hydrolysis of SB and AB. They provide a turnover frequency of TOF = 6.2 and 6.4 min(-1) for the hydrolysis of SB and AB at 25.0 +/- 0.5 degrees C, respectively. The TOF values are the best ever reported for the iron catalysts and comparable to other non-noble metal catalyst systems in both hydrolysis reactions. Kinetics of hydrogen generation from the hydrolysis of AB in the presence of PEG stabilized iron(0) nanoclusters was also studied by varying the catalyst concentration, substrate concentration, and temperature. This is the first kinetic study on the hydrolysis of AB in the presence of an iron catalyst. Moreover, PEG stabilized iron(0) nanoclusters can be separated magnetically from the catalytic reaction solution using a magnet and show catalytic activity even after tenth run. (C) 2011 Elsevier B. V. All rights reserved.