Highly monodisperse 5 nm Pd-Ni alloy nanoparticles (NPs) were prepared by the reduction of Pd(acac)(2)/Ni(acac)(2) mixtures with tert-butylamine-borane complex (TBAB) in the presence of oleic acid (OA) and oleylamine (OAm). Employing TBAB as an effective reductant and OA/OAm combination as an effective stabilizing agent is crucial to the formation of monodisperse Pd-Ni NPs. Experimental results collectively verify that the Pd-Ni alloy NPs form through the sequential nucleation-interdiffusion process and the simultaneous reduction of both metal precursors by the one-pot protocol is the key to the formation of homogeneous NPs. The Pd-Ni NPs were well-dispersed on carbon supports and chemically dealloyed after acetic acid washing through the selective dissolution of the less noble Ni component. The Pd-Ni NP catalysts exhibited much higher electrocatalytic activity and stability for ethanol oxidation than those of a commercial Pd/C catalyst.