The ability to produce supported metal nanoparticle catalysts via exsolution from a perovskite type oxide support under reducing conditions has been known for some time and is used in some formulations of automotive emissions control catalysts. The ability to re-dissolve and exsolve the metal via redox cycling has led to these systems being referred to as smart or regenerable catalysts. While this phenomenon is well known, the mechanism by which the transition metal is exsolved from the oxide host is still poorly understood. The relationships between the exsolution process and the resulting structure of the metal nanoparticles are also not well understood. In this talk we will discuss our recent mechanistic studies of the exsolution process. In this work we have used well-defined model systems and detailed structural analysis using electron microscopy and atomic force microscopy to characterize the nucleation and exsolution of Ni particles from Ni-doped strontium titanate. These studies show how exsolution produces unique surface structures consisting of metal particles partially submerged in pits on the oxide surface. We will show that this particle-in-a-pit morphology imparts unusually high thermal stability relative to metal nanoparticles deposited on the same support via conventional methods, making the exsolved nanoparticles highly resistant to deactivation via sintering. The effect of the particle-in-a-pit morphology on catalytic activity will also be discussed. In particular we will show that while the metal particles maintain their high activity for oxidation reactions, they have significantly decreased activity for the formation of filamentous carbon deposits when exposed to hydrocarbons under reducing conditions.