PdAu dendrimer-encapsulated nanoparticles (DENs) were prepared via sequential reduction of the component metals. When ALL is reduced onto 55-atom, preformed Pd DEN cores, analysis by UV-vis spectroscopy, electron microscopy, and extended X-ray absorption fine structure (EXAFS) spectroscopy leads to a model consistent with inversion of the two metals. That is, Au migrates into the core and Pd resides on the surface. However, when Pd is reduced onto a 55-atom Au core, the expected Au core-Pd shell structure results. In this latter case, the EXAFS analysis suggests partial oxidation of the relatively thick Pd shell. When the DENs are extracted from their protective dendrimer stabilizers by alkylthiols, the resulting monolayer-protected clusters retain their original Au core-Pd shell structures. The structural analysis is consistent with a study of nanoparticle-catalyzed conversion of resazurin to resorufin. The key conclusion from this work is that correlation of structure to catalytic function for very small, bimetallic nanoparticles requires detailed information about atomic configuration.