Multi-responsive poly(N-isoprpylacrlamide-methacrylic acid-acrylamide) [P(NIPAM-MAA-AAm)] copolymer microgel was prepared by free radical emulsion polymerization. Silver nanoparticles were fabricated inside the microgel network by in-situ reduction of silver nitrate. Swelling and deswelling behavior of the pure microgels was studied under various conditions of pH and temperature using dynamic light scattering. A red shift was observed in surface plasmon resonance wavelength of Ag nanoparticles with pH induced swelling of hybrid microgel. The catalytic activity of the hybrid system was investigated by monitoring the reduction of p-nitrophenol under different conditions of temperature and amount of catalysts. For this catalytic reaction a time delay of 8 to 10min was observed at room temperature, which was reduced to 2 min at high temperature due to swelling of microgels, which facilitated diffusion of reactants to catalyst surface and increased rate of reaction.