Thermosensitive core-shell microgels can be used as “nanoreactors” for the immobilization of metal nanoparticles. The microgels consist of a polystyrene core and a network made of poly(N-isopropylacrylamide) (PNIPA) cross-linked by N,N′-methylenebisacrylamide. The cross-linked PNIPA shell undergoes a volume transition at around 30 °C in which most of the water is expelled. The microgel particles exhibit a weak positive charge due to the cationic initiator. Metal nanoparticles (such as Au, Rh and Pt) with high catalytic activity can be homogeneously embedded into such a network. The oxidation of alcohols to the corresponding aldehydes or ketones has been chosen as a test reaction to probe the catalytic activity of such metal-microgel nanocomposite particles (metal@T-CoS-MiP). It is demonstrated that the oxidation can be catalyzed by the metal@T-CoS-MiP nanocomposites at room temperature in water using air as oxidant. The Au nanocomposite particles show the highest catalytic activity for the oxidation of benzyl alcohol. Moreover, it has been found that the catalytic activity of the metal nanocomposite can be modulated by the volume transition of microgel particles for the oxidation reaction of benzyl alcohol.