Pd-Y alloy nanoparticle-embedded carbon nanofiber (CNF) were sequentially synthesized by electrospinning a solution mixture containing Y precursor and polyacrylonitrile, stabilization, carbonization at 1200 degrees C, activation, and impregnation of Pd. The CNF acted as catalytic supports and templates, retaining the nanoparticle size at high temperatures; under these conditions, other nanomaterials would easily aggregate or sinter. To expose the surface of Y nanoparticles embedded into the CNF (Y-ACNF), mild and selective oxidation was conducted. The impregnated Pd exhibited the excellent degree of alloying with and dispersion on Y-ACNF, leading to outstanding activity with four-electron reaction of Pd-3/Y-ACNF for oxygen reduction reaction comparable to commercial platinum-based catalysts.