Carbon-supported Pd-Ni nanoalloy electrocatalysts with different Pd/Ni atomic ratios have been synthesized by a modified polyol method, followed by heat treatment in a reducing atmosphere at 500-900 degrees C. The samples have been characterized by X-ray diffraction (XRD), energy dispersive spectroscopy (EDS), transmission electron microscopy (TEM), X-ray photoelectron spectroscopy (XPS), cyclic voltammetry (CV), rotating disk electrode (RDE) measurements, and single-cell proton exchange membrane fuel cell (PEMFC) tests for oxygen reduction reaction (ORR). XRD and TEM data reveal an increase in the degree of alloying and particle size with increasing heat-treatment temperature. XPS data indicate surface segregation with Pd enrichment on the surface of Pd80Ni20 after heat treatment at >= 500 degrees C. suggesting possible lattice strains in the outermost layers. Electrochemical data based on CV, RDE. and single-cell PEMFC measurement show that Pd80Ni20 heated at 500 degrees C has the highest mass catalytic activity for ORR among the Pd-Ni samples investigated, with stability and catalytic activity significantly higher than that found with Pd. With a lower cost, the Pd-Ni catalysts exhibit higher tolerance to methanol than Pt, offering an added advantage in direct methanol fuel cells (DMFC). (C) 2009 Elsevier Ltd. All rights reserved.