Carbon black (CDX975) supported Pd and Pd-Co-Mo alloy nanoparticles are prepared by the reduction of metal precursors with hydrazine in reverse microemulsion of water/Triton-X-100/propanol-2/cyclohexane. The as-synthesized Pd-Co-Mo/CDX975 is heat treated at 973, 1073 and 1173 K to promote alloy formation. The prepared materials are characterized by powder XRD and EDX. Face-centred cubic structure of Pd is evident from XRD. The chemical composition of the respective elements in the catalysts is evaluated from the EDX analysis and observed that it is in good agreement with initial metal precursor concentrations. Oxygen reduction measurements performed by linear sweep voltammetry indicate the good catalytic activity of Pd-Co-Mo alloys compared to Pd. This is due to the suppression of (hydr)oxy species on Pd surface by the presence of alloying elements, Co and Mo. Among the investigated catalysts, heat-treated Pd-Co-Mo/CDX975 at 973 K exhibited good ORR activity compared to the catalysts heat treated at 1073 and 1173 K. This is due to the small crystallite size and high surface area. Rotating disk electrode (RDE) measurements indicated the comparable ORR activity of heat-treated Pd-Co-Mo/CDX975 at 973 K with that of commercial Pt/C. Kinetic analysis reveals that the ORR on Pd-Co-Mo/CDX975 follows the four-electron pathway leading to water. Moreover, Pd-Co-Mo/CDX975 exhibited substantially higher ethanol tolerance during the ORR than Pt/C. Good dispersion of metallic nanoparticles on the carbon support is observed from HRTEM images. Single-cell direct ethanol fuel cell tests indicated the comparable performance of Pd-Co-Mo/CDX975 with that of commercial Pt/C. Stability under DEFC operating conditions for 50 h indicated the good stability of Pd-Co-Mo/CDX975 compared with that of Pt/C. © 2010 Elsevier Ltd. All rights reserved.