Atomic layer deposition (ALD) was employed to synthesize supported Pt–Pd bimetallic particles in the 1 to 2 nm range. The metal loading and composition of the supported Pt–Pd nanoparticles were controlled by varying the deposition temperature and by applying ALD metal oxide coatings to modify the support surface chemistry. High-resolution scanning transmission electron microscopy images showed monodispersed Pt–Pd nanoparticles on ALD Al2O3- and TiO2-modified SiO2 gel. X-ray absorption spectroscopy revealed that the bimetallic nanoparticles have a stable Pt-core, Pd-shell nanostructure. Density functional theory calculations revealed that the most stable surface configuration for the Pt–Pd alloys in an H2 environment has a Pt-core, Pd-shell nanostructure. In comparison to their monometallic counterparts, the small Pt–Pd bimetallic core–shell nanoparticles exhibited higher activity in propane oxidative dehydrogenation as compared to their physical mixture.