The dynamic phase behavior of Grafoil-supported equimolar iron-palladium particles was explored using transmission electron microscopy (TEM), Mossbauer spectroscopy (MES), X-ray diffraction (XRD), and gas adsorption microcalorimetry. It was found that particles separate into zones of palladium and hematite (Fe2O3) after initial oxidation with the iron oxide primarily on the surface of the particles. Subsequent reduction in hydrogen at higher temperatures first partially reduces the iron oxide to magnetite (Fe3O4) and then fully reduces it to metallic iron. The iron produced goes into solution with the palladium to form a disordered fee alloy. The reduction and subsequent alloying of the iron occur slowly. Calorimetric studies indicate that ahoy forms on the surface after reduction at 373 K, but bulk techniques show most iron remains oxidized until reduction is carried out at 573 K or higher. Only after reduction at 673 K is bulk FePd alloy detected, and even then separate zones of metallic iron remain.