Pd or Pt alloyed with a secondary metal are the typical catalysts at the anode for the direct oxidation of methanol. The secondary metal is employed to diminish deactivation commonly ascribed to CO poisoning. Here we investigate the origin of the improved performance of Au-Pd core-shell and alloy nanocrystals as electrocatalysts for the methanol oxidation reaction (MOR), relative to Pd alone. Monodisperse Au-Pd core-shell nanocrystals were synthesized using H2 as a mild reducing agent followed by annealing under a 5% H2 atmosphere to produce the Au-Pd alloys. The nanocrystals were characterized using high-resolution electron microscopy to confirm their structures. The core-shell and alloy nanocrystals showed an improvement in specific activity with respect to pure Pd nanocrystals. Importantly, the stability was also improved by the inclusion of Au for both nanocrystals, being 2.7× higher for the alloy than for the core-shell after 30 min, while the activity is completely lost for the Pd nanocrystals within 10 min. We show that there is no evidence of CO formation for any of the Pd-based catalysts in an alkaline environment. The origin of the improvement in terms of both activity and stability results from positive shifts in the PdO formation/reduction potential caused by the presence of Au, which results in more Pd sites available for the MOR.