We report on a novel type of nanocomposite for use in the electrooxidation of formic acid in fuel cells. The material is composed of palladium nanoparticles (Pd-NPs) and carbon nanofibers (CNFs) and was prepared by electrospinning of the precursors Pd(acac)(2) and polyacrylonitrile, respectively, followed by thermal treatment to generate in-situ Pd-NPs that are well dispersed within the CNF framework. The nanocomposite was characterized by TEM, high-resolution TEM, SEM, XRD, Raman spectroscopy, and XPS. The size of the Pd-NPs ranges from 12 to 82 nm, depending on the temperature for carbonization (700-1,000 A degrees C). The length and width of the CNF is in the order of tens of micrometers and 300 to 500 nm, respectively. TEM and XPS studies indicate that the Pd-NPs are firmly embedded in the CNF, resulting in a good electrochemical stability of the composite. The electrocatalytic properties of the composite with respect to the oxidation of formic acid were studied by cyclic voltammetry and chronoamperometry. They showed a distinctly improved electrocatalytic activity and stability compared to a commercial Pd-on-carbon catalyst. The Pd/CNF composite carbonized at 900 A degrees C was found to display the best performance.