This paper is focused on the formation of cadmium sulfide (CdS) nanoparticles in the poly(ethylene glycol) (PEG)-modified microemulsion consisting of sodium dodecylsulfate (SDS), xylene, pentanol, and water. Due to the presence of the polymer a bicontinuous, sponge-like microemulsion is developed, which is used as a template phase for the particle formation beside the classical w/o microemulsion. The stability and size of the particles is strongly influenced by polymer concentration and molecular weight of PEG and aggregation seems to be favoured in the sponge-like template phase. However, the process of particle aggregation in the bicontinuous phase can be hindered by increasing the concentration and molecular weight of the polymer. After solvent evaporation CdS nanoparticles with diameters of 10 nm can be redispersed, which tend to build up larger aggregate clusters.