Carbon supported PdCo catalysts in varying atomic ratios of Pd to Co, namely 1∶1, 2∶1 and 3∶1, were prepared. The oxygen reduction reaction (ORR) was studied on commercial carbon-supported Pd and carbon-supported PdCo nanocatalysts in aqueous 0.1 M KOH solution with and without methanol. The structure, dispersion, electrochemical characterization and surface area of PdCo/C were determined by X-ray diffraction (XRD), Transmission Electron Microscopy (TEM) and Cyclic Voltammetry (CV), respectively. The electrochemical activity for ORR was evaluated from Linear Sweep Voltammograms (LSV) obtained using a rotating ring disk electrode. The catalysts were evaluated for their electrocatalytic activity towards oxygen reduction reaction (ORR) in Alkaline Polymer Electrolyte Membrane Fuel Cells (APEMFCs). PdCo(3∶1)/C gives higher performance (85 mW cm⁻²) than PdCo(1∶1)/C, PdCo(2∶1)/C and Pd/C. The maximum electrocatalytic activity for ORR in the presence of methanol was observed for PdCo(3∶1)/C. First principles calculations within the framework of density functional theory were performed to understand the origin of its catalytic activity based on the energy of adsorption of an O₂ molecule on the cluster, structural variation and charge transfer mechanism.