Close integration of metal nanoparticles (NPs) into a metal-organic framework (MOF) can be leveraged to achieve tailored functionality of the resulting composite structure. Here, we demonstrate a "ship-in-a-bottle" approach to produce ≈4.0 nm bismuth (Bi) NPs within a thiol-rich zirconium-based MOF of Zr-DMBD (DMBD = 2,5-dimercapto-1,4-benzenedicarboxylate). We found that the incorporation of Bi NPs into the Zr-DMBD framework relies on the free-standing thiol groups. These thiols have two roles - (i) aid in binding precursor Bi3+ preventing to form the insoluble bismuthyl unit (BiO+) and (ii) controlling the growth of Bi NPs. The resulting composite, denoted as BiNP@Zr-DMBD-1, displayed enhanced catalytic activity due to strong interactions between Bi NPs and organic linkers mediated by sulfur, promoting charge transfer from the Bi NP to the MOF matrix. BiNP@Zr-DMBD-1 remained stable after CO2 electroreduction to formate in a flow setting, with >88% faradaic efficiency at 25 mA cm-2 current density. Additionally, BiNP@Zr-DMBD-1 composite was shown to exhibit photoactivity beyond the typical near-UV absorption range of Bi NPs, where it completely degraded methylene blue dye within 1 h of blue LED irradiation. This work therefore underlines the potential of thiol-rich MOFs in developing new nanomaterials for diverse catalytic applications.