The structural and chemical heterogeneity of 2.5-nm Pt50Ru50 electrocatalysts was studied by transmission electron microscopy using selected area diffraction, lattice imaging, electron-energy loss spectroscopy, and energy-dispersive X-ray spectroscopy. The catalysts with the highest methanol oxidation activities exhibit oxidation-induced phase separation on the nanoscale to from Pt-rich metal embedded in Ru-rich hydrous and anhydrous oxide. Reduction of the oxide-on metal samples produces a true bimetallic face-centered cubic Pt50Ru50 alloy, with 275 times lower oxidation activity.