Pd-Pt-Ni nanoalloy catalysts have been synthesized by a polyol reduction method and characterized for the oxygen reduction reaction (ORR) in proton exchange membrane fuel cells (PEMFCs). The performance of the membrane-electrode assembly (MEA) fabricated with the Pd-Pt-Ni catalysts is found to increase continuously in the entire current density range with the operation time in the PEMFC until it becomes comparable to that of commercial Pt. The Pt-based mass activity of Pd-Pt-Ni exceeds that of commercial Pt by a factor of 2, and its long-term durability is comparable to that of commercial Pt within the 200 h of operation. Compositional characterizations by energy dispersive spectroscopy (EDS) and X-ray photoelectron spectroscopy (XPS) suggest a dealloyed active catalyst phase consisting of Pd-rich core and Pt-rich shell, formed by dissolution of Pd and Ni under the testing conditions. The surface catalytic activity of nanoparticles can be modified by the strain effect caused by lattice mismatch between the surface and core components. Transmission electron microscopy (TEM) observation of the MEA cross-section reveals that the Pd ions move into the Nafion membrane and even to the anode side and redeposit on reduction by hydrogen crossover. The deposition of Pd-rich PdPt particles mainly forms a band at the center of the membrane and along the cathode/membrane interface. On the other hand, the Ni ions ion-exchange with the protons in the Nafion membrane. (C) 2011 Elsevier B.V. All rights reserved.