In a search for electrocatalysts based on other metals with comparable attributes to very scarce and expensive Pt, we studied the kinetics of the oxygen reduction reaction (ORR) on carbon-supported Pd3Fe alloy nanoparticles in HClO4 and NaOH solutions. In acid solution, the electrocatalyst's activity for the ORR is slightly higher than that of commercial Pt/C. The reaction kinetics involves predominantly a four-electron reduction with the first charge-transfer step being the rate-determining one. The synthesis of a Pd overlayer on the Pd3Fe alloy's surface at elevated temperatures is due to strong segregation effects. The major cause of this electrocatalyst's high activity appears to be the downshifting of the d-band center of Pd overlayer, resulting in a weaker interaction between the oxygen-containing species and the Pd surface. We demonstrated a further enhancement of the ORR kinetics with a Pt monolayer-covered Pd3Fe/C electrocatalyst. In HClO4 solution, the mass-specific activity of Pt/Pd3Fe/C was about five times higher than that of commercial Pt/C, surpassing the Pt/Pd/C. In situ XANES data indicate that this elevated ORR activity may be due to the decreased formation of PtOH, and weaker oxygen adsorption on Pt/Pd3Fe/C.