NOVELTY - Stabilized aluminum nanoparticles having reactivity with water, are obtained by combining an alane precursor, a catalyst, and an organic passivating agent in a solution, and ultrasonically processing the solution to initiate thermal decomposition of the alane precursor and form the nanoparticles. The formed nanoparticles have a face-centered cubic crystal structure comprising an inner aluminum core surrounded by an oxide shell and an organic outer shell.    USE - Formation of stabilized aluminum nanoparticles having reactivity with water, used for generating hydrogen for use in power generation applications e.g. in fuel cells and internal combustion engines, and in propulsion applications e.g. gas turbine engines. Can also be used to power communication equipment e.g. radios and cell phones, computers, and lighting, remote sensors, vehicles, and combustion applications e.g. micro turbines and thermoelectric engines.    ADVANTAGE - The method enables formation of stabilized aluminum nanoparticles having excellent stability in air and solvent. The obtained nanoparticles enable generation of hydrogen with a yield of 95% or more. The nature of protective aluminum oxide shell is altered in a manner which allows aluminum-water reaction to proceed easily and safely to generate large quantities of hydrogen, which can be accessed by an environmentally-friendly method. The reaction of stabilized aluminum nanoparticles with water is spontaneous and requires no promoters or energy to initiate the reaction. If active cooling is applied, hydrogen can be slowly delivered as it is produced, negating the need for a high-pressure vessel and improving the safety of the system. The peaks for the nanoparticles correspond to the peaks for aluminum, confirming the ability to form aluminum nanoparticles with an aluminum core. The method provides an advantage in that aluminum and water can be stored to generate hydrogen where and when needed, without the need for storing and/or transporting large quantities of gaseous or liquid hydrogen, which can be dangerous.