Reductive removal by hydrogeneration using supported Pd/M (M= Cu, Pt, Ag, Co, Fe, Mo, Ni, Rh, Ir, Mn and Cr) bimetallic catalysts has emerged as a promising alternative for nitrate removal in drinking water . Fundamental understanding how the atomic arrangement of Pd and a second element, such as Cu, affect the activity nitrite reduction and selectivity of dinitrogen will be accomplished by coordinated synthesis (Shapley), activity/selectivity/efficiency measurements (Werth) and nanostructure determination (Yang & Xu). In this paper, we report a systematic study of novel polyvinylpyrrolidone (PVP) stabilized nanoscale Pd-Cu colloids, with homogeneous and narrow size distribution, with Pd: Cu ratios varying from 50:50 to 90:10. Initial measurements on catalytic activity for nitrate reduction demonstrated a dependence on the relative composition. Electron microscopy studies, including Z-contrast imaging , energy-dispersive X-ray emission (EDX), electron diffraction and high-resolution electron microscopy (HREM), revealed a surprising change in structure at the 80:20 Pd-Cu composition, where, with less than 80% Pd,the nanoparticle forms a core-shell structure but for nanoparticles containing 80% or more Pd, it is homogeneous. We are at the pivotal point of directly correlating these nano-structures with the catalytic activity. Such an understanding is essential for the efficient development of catalysts for the purification of drinking water.