Successfully prepared via Ar glow-discharge plasma reduction, Au-Pd bimetallic nanoparticles were highly active in the selective oxidation of benzyl alcohol, showing a rate constant of 0.50 h(-1), which was 12.5 and 2x that of Au and Pd monometallic catalysts, respectively. Characterization analyses attributed the enhancement in both activity and selectivity to a Pd-rich shell/Au-rich core structure with abundant surface-coordination-unsaturated Pd atoms of those effectively confined and well-dispersed Au-Pd nanoparticles. As a green, efficient, and safe protocol, plasma reduction outperformed conventional H-2 thermal reduction due to the different particle nucleation and growth mechanism, which afforded modified morphology and surface chemistry of metal nanoparticles. Further oxidation and re-reduction of plasma-reduced Au-Pd catalyst resulted in the atomic rearrangement of nanoparticles, leading to inferior catalytic performance. (C) 2012 Elsevier Inc. All rights reserved.