A simple and eco-friendly procedure has been devised for the green synthesis of palladium nanoparticles, using the aqueous extract of herbal tea (Stachys lavandulifolia), a renewable and nontoxic natural phyto-exudate. The water-soluble components of the extract act as reducing agent and stabilizer. This green route does not require a surfactant or capping agent for the growth of palladium nanoparticles. The generated nanoparticles were analysed using UV-visible spectroscopy, transmission electron microscopy, X-ray diffraction, Fourier transform infrared spectroscopy, scanning electron microscopy, energy dispersive X-ray analysis and inductively coupled plasma. The palladium nanoparticles having spherical shape and dimensions of between 5 and 7nm were employed as a homogeneous catalyst for Suzuki coupling reactions conducted in water under mild conditions. Good yields of products, a facile work-up, no evidence of leached palladium from the catalyst surface and smooth recovery of the catalysis by adding ethyl acetate, which could be reused at least eight times, confirm the very good efficiency of the catalytic reaction. Copyright (c) 2014 John Wiley & Sons, Ltd.