This Letter presents the thermal stability and energetic reaction properties of palladium coated aluminum nanoparticles. The classical MD simulations are conducted using a new EAM force field. The results reveal that, when the initial temperature is higher than 600 K and lower than 900 K, a two-stage reaction may occur. At the first stage, the reaction rate is determined by the solid-state diffusion of Al atoms. At the second stage where the particle temperature is greater than the melting point of Al, the alloying reaction between the liquid Al core and the Pd shell happens with a much faster rate. Crown Copyright (C) 2010 Published by Elsevier B. V. All rights reserved.