This study focuses on the synthesis and electrochemical performance (i.e, activity and stability) of advanced electrocatalysts for the oxygen reduction reaction (ORR), made of Pt–Ni nanoparticles embedded in hollow graphitic spheres (HGS). The mechanism of the confined space alloying, that is, the controlled alloying of bimetallic precursors with different compositions (i.e., Pt3Ni, PtNi, and PtNi3) within the HGS mesoporous shell, was examined in detail. It was found that the presence of platinum during the reduction step, as well as the application of high annealing temperatures (at least 850 °C for 3.5h in Ar), are necessary conditions to achieve the complete encapsulation and the full stability of the catalysts. The evolution of the activity, the electrochemical surface area, and the residual alloy composition of the Pt–Ni@HGS catalysts was thoroughly monitored (at the macro- and nanoscale level) under different degradation conditions. After the initial activation, the embedded Pt–Ni nanoparticles (3–4 nm in size) yield mass activities that are 2- to 3.5-fold higher than that of pure Pt@HGS (depending on the alloy composition). Most importantly, it is demonstrated that under the normal operation range of an ORR catalyst in PEM-FCs (potential excursions between 0.4 and 1.0 VRHE) both the nanoparticle-related degradation pathways (particle agglomeration) and dealloying phenomena are effectively suppressed, irrespectively of the alloy composition. Thus, the initial enhanced activity is completely maintained over an extended degradation protocol. In addition, owing to the peculiar configuration of the catalysts consisting of space-confined nanoparticles, it was possible to elucidate the impact of the dealloying process (as a function of alloy composition and severity of the degradation protocols) separately from other parallel phenomena, providing valuable insight into this elusive degradation mechanism.