Carbonyl complexes of transition metals (M-x(CO)(y), where x = 1, 2, or 3 and y 6, 10, or 12 for M = W, Re, or Os, respectively) inserted into single walled carbon nanotubes (SWNT, diameter 1.5 nm) transform into metallic nanoparticles (MNPs) under heat treatment or electron beam irradiation. The host-nanotube acts as an efficient template, controlling the growth of MNPs to similar to 1 nm in diameter. The only co-product of nanoparticle formation, carbon monoxide (CO) gas, creates pockets of high pressure between nanoparticles, thus preventing their collision and coalescence into larger structures. As a result, the MNPs stay largely spheroidal in shape and are uniformly distributed throughout the entire length of the SWNT. Despite their extremely small size (on average each MNP contains 30-90 atoms) and no protection of their surface by a capping layer of molecules, the metallic nanoparticles encapsulated in nanotubes are very stable under ambient conditions and even at elevated temperatures. Aberration-corrected high-resolution transmission electron microscopy reveals the crystalline nature of the MNPs, probes their interactions with the nanotube interior and illustrates the complex dynamics of confined MNPs in real-time and direct-space.