Methane upgrading into energy-dense liquid derivatives (such as methanol or mid-range hydrocarbons) is a highly desirable process to increase its utilisation. The selective oxidation of methane using hydrogen peroxide has been investigated using unsupported gold-palladium nanoparticles prepared using colloidal methods. The effect of the reaction conditions and the catalyst parameters have been systematically investigated. Poly(vinyl) pyrrolidone (PVP) stabilised Au-Pd colloids produce methyl hydroperoxide as the primary reaction product, which is subsequently converted to methanol with high oxygenate selectivity. The stability and re-use characteristics of the colloidal catalyst have also been assessed for methane oxidation with hydrogen peroxide.