Water-dispersible polypyrrole nanospheres with diameters of less than 100 nm were synthesized in high yield without any templates, surfactants, or functional dopants by the introduction of 2,4-diaminodiphenylamine as an initiator into a reaction mixture of pyrrole monomer, oxidant, and acid. The initiator plays a critical role in tailoring the nanostructures of polypyrrole. 2,4-Diaminodiphenylamine interacts with acid to form cations, which combine with various anions to self-assemble resulting in different size nanomicelles. These nanomicelles, stabilized by initiator molecules, act as templates to encapsulate pyrrole and oxidant leading to the formation of nanospheres during polymerization. When smaller acids are used, smaller diameter sphere-like polypyrrole nanostructures are obtained. The as-synthesized polypyrrole nanospheres can then be used to fabricate highly conducting nitrogen-doped carbon nanospheres with controllable sizes of 50-220 nm with monodispersities up to 95% after pyrolysis. The size of the carbon nanospheres decreases by 20-30 nm due to carbonization when compared to the original polymer nanospheres. The molecular structures, morphologies, and electrical properties along with the formation mechanism of the polypyrrole and carbon nanospheres are discussed.