First principle calculations were used to screen the activity of core shell oxygen reduction reaction (ORR) electrocatalysts for use in direct methanol fuel cells (DMFCs). Density functional theory (DFT) calculations indicate that the subsurface addition of 3d transition metals improves the activity of a Pd3Pt electrocatalyst by reducing its oxygen binding energy. Optimal activity close to the maximum of the ORR volcano curve is predicted for Pd3Fe@Pd3Pt and Pd3Mn@Pd3Pt core-shell catalysts. To validate the theoretical predictions, a series of Pd3M@Pd3Pt/C electrocatalysts (M = Ni, Co, Fe, and Cr) was prepared by galvanic replacement. Optimal activity and high methanol tolerance were observed for Pd3Fe@Pd3Pt. Compared with commercial Pt catalysts, the Pd3M@Pd3Pt structured catalysts utilize less platinum and yet display favorable ORR activity and selectivity.