The thermal evolution of titania-supported Au shell–Pd core bimetallic nanoparticles, prepared via colloidal routes, has been investigated by in situ XPS, DRIFTS, EXAFS and XRD and ex situ HRTEM. As-prepared nanoparticles are terminated by a thin (∼5 layer) Au shell, encapsulating approximately 20 nm diameter cuboctahedral palladium cores, with the ensemble stabilised by citrate ligands. The net gold composition was 40 atom%. Annealing in vacuo or under inert atmosphere rapidly pyrolyses the citrate ligands, but induces only limited Au/Pd intermixing and particle growth <300 °C. Higher temperatures promote more dramatic alloying, accompanied by significant sintering and surface roughening. These changes are mirrored by the nanoparticle catalysed liquid phase selective aerobic oxidation of crotyl alcohol to crotonaldehyde; palladium surface segregation enhances both activity and selectivity, with the most active surface alloy attainable containing ∼40 atom% Au.