The oxygen reduction reaction is of major importance in energy conversion and storage. Controlling electrocatalytic activity and its selectivity remains a challenge of modern electrochemistry. Here, first principles calculations and analysis of experimental data unravel the mechanism of this reaction on Au-Pd nanoalloys in acid media. A mechanistic model is proposed from comparison of the electrocatalysis of oxygen and hydrogen peroxide reduction on different Au-Pd ensembles. A H2O production channel on contiguous Pd sites proceeding through intermediates different from H2O2 and OOH(σ) adsorbate is identified as the bifurcation point for the two reaction pathway alternatives to yield either H2O or H2O2. H2O2 is a leaving group, albeit reduction of H2O2 to H2O can occur by electrocatalytic HO-OH dissociation that is affected by the presence of adsorbed OOH(σ). Similarities and differences between electrochemical and direct synthesis from H2 + O2 reaction on Au-Pd nanoalloys are discussed.