Ni-25Fe and Ni-15Fe-13Mg (at.%) alloy nanoparticles were fabricated by a thermal plasma method, and their catalytic properties for methanol decomposition were examined in the 513-793 K temperature range. Both nanoparticles started showing activity for methanol decomposition above 593 K, with activity rapidly increasing with temperature. Ni-15Fe-13Mg showed much higher activity and less carbon deposition than Ni-25Fe. These results indicated that the addition of Mg in the Ni-Fe alloy significantly increased the activity, but suppressed carbon deposition. Characterization of the nanoparticles revealed that the Mg was segregated and a thin layer of MgO was formed on the surface of the nanoparticles. It is likely that the formation of MgO suppressed carbon deposition, but enhanced the activity by delaying the coarsening of nanoparticles during the reaction. (C) 2016 Elsevier B.V. All rights reserved.