Application of tertiary alloy nanoparticles is becoming more important, however, the local structure of such alloyed particles, which is critical for tailoring their properties, is not yet very clearly understood. In this study, we present detailed theoretical analysis on the atomistic structure and CO adsorption in Pd70Co20X10 (X = Au, Mo, Ni) tertiary composite alloys for their application in fuel cells toward oxygen reduction reaction (ORR). Basic structure and the most stable configurations for all the three composites are determined. Quantum mechanical approaches and classic molecular dynamics methods are applied to model the structure and to determine the lowest energy configurations. Our theoretical results agree well with the experimental results of XRD patterns. Considering those structures as the base, simulations were performed to determine the magnitude of CO poisoning. The results obtained by ab-initio calculations allow us to estimate the CO-tolerance that these catalysts might have, along with those obtained for Pd-Co-Ni (70:20:10 atom %) tertiary alloy, and compared with commercial Pt (1 1 0) catalyst. From these results, a comparison has been made to show different CO adsorption strengths. This is the first step to fabricate an efficient engineering design that allows us to obtain high-performance, low-cost nanostructured catalysts. Copyright (C) 2010 John Wiley & Sons, Ltd.