A 1% Ru/C catalyst prepared by the sol immobilization method showed a high yield of γ-valerolactone from levulinic acid. We performed an optimization of the catalyst by varying the preparation variables involved in the sol immobilization method and detremined that the ratio of PVA, NaBH4 to Ru and heat treatment conditions play a crucial role in the synthesis of active and selective catalysts. By varying these parameters we have identified the optimum conditions for catalyst preparation by providing well dispersed nanoparticles of RuOx on the carbon support that are reducible under low reaction temperature and in turn gave an enhanced catalytic activity. In contrast to a catalyst prepared without using a PVA stabiliser, the use of a small amount PVA (PVA/Ru = 0.1) provided active nanoparticles, by controlling the steric size of the Ru nanoparticles. An optimum amount of NaBH4 was required in order to provide the reducible Ru species on the surface of catalyst and further increase in NaBH4 was found to cause a decline in activity that was related to the kinetics of nanoparticle formation during catalyst preparation. A variation of heat treatment temperature showed a corresponding decrease in catalytic activity linked with the sintering and an increase in particle size.