• A simple one-step hydrothermal method for synthesis of VO 2 (M) nanoparticles. • Controlled easily phase transition temperature of VO 2 (M) nanoparticles to ∼50 o C. • Controllable oxygen vacancies for tuning phase transition temperature ( T C ). • Applied hydrazine as both a reducing agent and a shape controller. • Developed VO 2 /PVB composite film for exemplary optical performance. Vanadium dioxide (VO 2 ) is a promising material for energy-saving smart windows because of its reversible metal-to-insulator transition and accompanying large changes in optical properties. However, the relatively high phase transition temperature ( T C ≈ 68 °C) restricts largely its widespread application. In addition, one-step hydrothermal synthesis of VO 2 (M) nanoparticles with high thermochromic performance that meets commercial requests is still lacking. This study represents the synthesis of oxygen vacancies VO 2 (M) (Ov-VO 2 ) nanoparticles (32–46 nm) with T C ∼ 50 °C by a simple but efficient one-step hydrothermal method. It is found that when the reaction temperature rises to 300 °C and the pressure reaches 8.5 MPa, Ov-VO 2 nanoparticles can be obtained within short time of around 3 h. Specially in processing, hydrazine (N 2 H 4 ) is selected as both a reducing agent for V 5+ to V 4+ and a structure directing agent for particle formation and growth. To better understand, the above results are demonstrated by Density Functional Theory (DFT) calculations, which also reveal that N 2 H 4 can lead to the formation of oxygen vacancies. To test its optical performance, a composite film composed by dispersing VO 2 (M) nanoparticles into polyvinyl butyral (PVB) exhibits excellent optical properties ( T lum = 43.4% and Δ T sol = 17.3%), which close to the simulation results ( T lum = 32.4% and Δ T sol = 23.7%). This may open a path for the simple and scale-up synthesis of VO 2 nanoparticles with exemplary performance for smart window applications.