Thermoresponsive nanoparticles (NPs) represent an important class of hybrid material by imparting a thermoresponsive characteristic to functional NPs. Strikingly, significant discrepancies in the optical and catalytic properties of thermoresponsive noble metal NPs have been widely recognized yet to be unraveled in the literature, manifesting in small red-shift with the increased intensity as compared to large red-shift of plasmonic absorption of noble metal NPs with the decreased intensity (i.e., optical property) and non-monotonic as opposed to “on/off” catalysis of noble metal NPs (i.e., catalytic activity), as temperature rises. Herein, we report on in-situ crafting of noble metal NPs (i.e., Au) intimately and permanently ligated by thermoresponsive polymers (i.e., poly(N-isopropylacrylamide); PNIPAM) using double-hydrophilic star-like block copolymer as nanoreactor to resolve the paradox noted above. The strongly ligated PNIPAM on the Au NP surface effectively eliminate the inevitable ligand dissociation issue due to the dynamic binding nature of ligands as in copious past work. As such, two seemingly contradictory observations on both temperature-dependent optical and catalytic properties largely encountered in the literature are elucidated by capitalizing on judiciously designed thermoresponsive PNIPAM-capped Au NP system. Intriguingly, as temperature increases over the lower critical solution temperature (LCST) of PNIPAM, plasmonic absorption peak of PNIPAM-capped Au NPs red-shifts accompanied by an increase in intensity in the absence of free linear PNIPAM, whereas the characteristic absorption peak red-shifts greatly with a decreased intensity in the presence of deliberately introduced linear PNIPAM. Moreover, remarkably, the absence or addition of free linear PNIPAM also accounts for a non-monotonic (i.e., non-Arrhenius) or a switchable “on/off” catalytic performance of PNIPAM-capped Au NPs, respectively. The star-like block copolymer nanoreactor strategy enables the creation of a rich diversity of hybrid materials composed of functional NPs (e.g., Ag, TiO2, SiO2, Fe3O4, and BaTiO3) permanently tethered with polymers of interest for future applications.