We report a novel biochemical method based on the sacrificial hydrogen strategy to synthesize bimetallic gold (Au)-palladium (Pd) nanoparticles (NPs) with a core/shell configuration. The ability of Escherichia coli cells supplied with H(2) as electron donor to rapidly precipitate Pd(II) ions from solution is used to promote the reduction of soluble Au(III). Pre-coating cells with Pd(0) (bioPd) dramatically accelerated Au(III) reduction, with the Au(III) reduction rate being dependent upon the initial Pd loading by mass on the cells. Following Au(III) addition, the bioPd-Au(III) mixture rapidly turned purple, indicating the formation of colloidal gold. Mapping of bio-NPs by energy dispersive X-ray microanalysis suggested Au-dense core regions and peripheral Pd but only Au was detected by X-ray diffraction (XRD) analysis. However, surface analysis of cleaned NPs by cyclic voltammetry revealed large Pd surface sites, suggesting, since XRD shows no crystalline Pd component, that layers of Pd atoms surround Au NPs. Characterization of the bimetallic particles using X-ray absorption spectroscopy confirmed the existence of Au-rich core and Pd-rich shell type bimetallic biogenic NPs. These showed comparable catalytic activity to chemical counterparts with respect to the oxidation of benzyl alcohol, in air, and at a low temperature (90°C).