Nano scaled silicon particles (nc‐Si) having a diameter of about 3 to 9 nm were synthesized by direct reduction of SiCl4 with H2 in a LaCl3 matrix by a vapour deposition (CVD) route. The particles were characterized by diffuse reflection fourier transform spectroscopy (DR/FT‐IR), photoluminescence (PL), electron paramagnetic resonance (EPR) and microwave detected photo induced current transient spectroscopy (MD‐PICTS). EPR measurements identified dangling bond defects on the surface of as‐prepared nc‐Si particles in the LaCl3 matrix. The number of dangling bonds significantly decreases upon extraction of the nc‐Si with ethanol. As expected, the dangling bonds disappear completely after treatment with 1% HF solution. A strong correlation between presence of dangling bond defects and electronic properties was found. The temperature dependent photoconductivity in conjunction with the EPR and PL results allowed us to analyze the defect structure of the nc‐Si particles. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)