If you drive east from Highway 280 on Page Mill Road in Palo Alto, CA, it's hard to miss Hewlett-Packard. The giant computer maker's stately headquarters sprawls along the right side of the street, overlooking a maze of parking lots. Harder to spot is Nanosys, a small nanotechnology startup tucked away in a low-slung bungalow across the road.

But Nanosys's humble facade masks the bubbling excitement of one of nanotech's hottest startups. Emerging from conference room Selenium-rooms here are named after elements in semiconductor materials-Stephen Empedocles, Nanosys's cofounder and director of business development, and Erik Scher, a Nanosys chemist, produce two small vials of what looks like snow cone syrup, one glowing blue and the other red. In the vials are "nanocrystals," tiny semiconductor particles. Since the crystals are too small to be seen by the naked eye, Scher switches on a computer that displays their magnified images; spheres, stars, and thin rods fill the screen. Nanosys is betting that these particles will be building blocks of the coming commercial revolution in nanotech.